Jury Convicts 2 of Fraud in Billboard Scam
Posted February 6, 2008 4:57 p.m. EST
Updated February 6, 2008 8:45 p.m. EST
Raleigh, N.C. — A former Forsyth County man was convicted Wednesday of defrauding investors, including members of his church, of millions of dollars through a phony billboard company.
A jury found Scott Hollenbeck, 53, who now lives in Orlando, Fla., guilty of criminal conspiracy and 12 counts of mail fraud. He will be sentenced later.
Hollenbeck was a salesman with Mobile Billboards of America, a truck-mounted billboard program that shut down in 2004 amid allegations that it was a Ponzi scheme. Before that happened, however, he had convinced dozens of families who attended Gospel Light Baptist Church with him to invest in the company.
The clincher for most of the church members was a "surety bond" that Hollenbeck presented to them and that supposedly guaranteed their investments, as well as 13.5 percent interest.
Hollenbeck, an insurance agent, made more than $2 million in sales commissions in the scheme, authorities said.
Mobile Billboards defrauded investors of an estimated $55 million before securities officials forced the company to shut down, authorities said.
“This sophisticated fraud scheme caused terrible harm to elderly investors in North Carolina and elsewhere – investors who
had played by the rules during their working years and were seeking financial security in retirement,” U.S. Attorney George Holding said in a statement.
In addition to Hollenbeck, Laurinda Holohan, 63, of Concord, Ohio, was convicted of conspiracy and mail fraud. Authorities said she conducted banking transactions from her basement that allowed the scheme to operate.
Barry Maloney, 65, of Bethesda, Md., who was Mobile Billboards' attorney, was acquitted of all charges.
Three others linked to Mobile Billboards – former chairman Michael Lomas, of Pasadena, Calif.; bookkeeper Susan Knight, 48, of Eastlake, Ohio; and salesman Arthur Anderson Jr., 49, of Raleigh – previously pleaded guilty in the case and are awaiting sentencing.