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Sonoma man pleads guilty in $1.6M fraud

Michael Thomas Hamilton, the 49-year-old Sonoma resident indicted last November on 22 counts of wire fraud, mail fraud and money laundering, pleaded guilty Thursday, in federal district court in San Francisco, to two counts of wire fraud.

Hamilton was arrested last year after fraudulently collecting more than $1.6 million, between February 2011 and October 2013, from at least 20 investors in a Ponzi scheme that promised high rates of return from the sale of books on Amazon.com and other online platforms. Investors were told if they did not recover their initial investment by a given date, they would automatically earn interest of 10 percent. According to the FBI investigation that uncovered the scheme, Hamilton paid investors “royalties” from book sales to keep them happy and unsuspecting, but most of the money actually came from new or existing investors in a classic Ponzi, pyramid scenario.

Hamilton operated a modest book-selling business he called Small Leaf, from an address in the De Anza Moon Valley mobile home park off Fifth Street West. He solicited many of his investors through Craigslist, primarily in California, Oregon and Massachusetts, telling them Small Leaf generated more than $1 million in annual revenues.

In pleading guilty and avoiding conviction on the 20 other counts, Hamilton admitted he engaged in a scheme to obtain money and property by means of materially false and fraudulent representations regarding Small Leaf.

Hamilton is due to be sentenced on Sept. 4 and could receive up to 20 years in federal prison on each of the two counts, plus restitution and a fine of $250,000 on each count.


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