Okla. jury convicts 2 more in $4M fraud; Loudon man involved

TULSA, Okla. - A federal jury in Oklahoma convicted two men Friday in a $4 million money laundering conspiracy and investment fraud case with international ties.

Joseph L. Thornburgh, 61, of Mounds, and Steven Fishman, 59, of Corona, Calif., were convicted following a two-week trial that included testimony from American and Australian investors duped into buying worthless bonds issued decades ago.

The two men were indicted in November 2007 and charged with participating in a conspiracy to commit wire fraud, mail fraud and money laundering. They're to be sentenced Sept. 29.

In April, a third man charged in the case, Robert W. Searles, 71, of Loudon, Tenn., pleaded guilty to conspiracy to commit money laundering. He will be sentenced Aug. 28. A fourth defendant, Wayne Davidson of Wanganui, New Zealand, remains at large.

U.S. Attorney David O'Meilia said the fraud involved the sale of 19th-century railroad bonds and obscure 100-year- old Chinese bonds to more than 400 investors, many of whom were sheep farmers in New Zealand.

O'Meilia said the investments were based on bonds issued in the 1850s by now-defunct GH&H Railroad and issued by the government of China that fell to communists in 1949.

Witnesses testified that Thornburg and Fishman had promoted the bonds as having astronomical values and said they could be used to obtain lines of credit from European banks, which could then be used in high-yield investment programs to reap millions of dollars of profit for investors.

The investors said they were told the investments were risk-free and that the U.S. government and Amtrak backed the railroad bonds. Prosecutors said neither the government nor Amtrak had any connection to the bonds, which could only be valued as collectibles.

Stan Monroe, an attorney for Fishman, said during his closing argument that his client wasn't promoting any illegal activity. Thornburg's attorney, Gl oyd McCoy, called her client a victim because he had a "good-faith" belief in the program.

Federal prosecutors learned of the scheme after investors in Tulsa told them they had lost their life savings, O'Meilia said.