On Oct. 16, 2014, in Salt Lake City, Utah, James Ronald Donahoo, II, of Pleasant Grove, was sentenced to 48 months in prison, three years of supervised release and ordered to pay $2,739,501 in restitution to victims of the fraud. A forfeiture money judgment has been entered in the same amount. Donahoo pleaded guilty in June 2014 to wire fraud, money laundering and failure to file a tax return. According to his plea agreement, Donahoo misrepresented to investors that if they would invest in Paradigm Investing, Inc., they would make a 1 to 3 percent return on their investment, which would be paid out monthly. Paradigm never earned any revenues on any of its purported investments from which interest payments could have been made. Donahoo created false bank statements for Paradigm that he showed to investors to convince them that the investment was safe, low risk, and a good investment. He also told investors that the risk was mitigated by the fact that for every dollar invested, he had a dollar in the bank. Donahoo made payments to investors totaling more than $267,000 out of investor funds in furtherance of what was a Ponzi scheme. In addition, Donahoo
did not file a tax return for 2008, even though he transferred funds from the Paradigm bank account to his personal bank account totaling $335,000. He used those funds for personal purposes.
