Position: President, Schneider Management CO.
Crime: Anointed as “The Woman Who Could Save Parma Heights,” Joanne Schneider’s Cornerstone Project was an ambitious bid to revitalize the suburb’s sleepy business district with a $90 million retail and housing development. Instead, Schneider was raising money for her project through the sale of unregistered securities and promissory notes – essentially a formal version of an IOU. An extravagant groundbreaking ceremony was held on July 10, 2003 for the Cornerstone Project, but not long after, a man noticed something suspicious about his mother’s finances. One of her investments was paying 18 percent interest rates, nearly four times the commercial rate. This seemed too good to be true, so the man reported Joanne to the Division of Securities, the brand of the Ohio Department of Commerce that polices stocks and bonds. The agency quickly realized the scheme and charges were filed against Schneider.
Losses: Schneider, with the help of her husband Alan, was accused of bilking nearly 740 investors out of more than $60 million.
Charges/Sentencing: Schneider initially pled guilty to investment charges and on March 12, 2009, was sentenced to three years in prison. After complaints of a lenient sentencing by victims, a state appeals court vacated Schneider’s three-year sentence, and referred the case to Cuyahoga Country Prosecutors. From there, Schneider pleaded guilty to five counts of securities fraud, two counts of selling unregistered securities and one count each of engaging in a pattern of corrupt activity, making misrepresentations in the sales of securities, theft involving an elderly victim, and money laundering. This guilty plea carried with it up to 10 years in prison.