United States v. Steven M. Wood

Wood appeals his conviction for tax evasion.

I

In December 1983, Wood established an entity known as the S-M-W Investment Group out of an office in Kalispell, Montana. At approximately the same time, Wood created entities known as Rover Resources and Norcross. Wood and his employees advertised these companies as Canadian mining exploration penny stocks that, if successfully promoted, would be listed and publicly traded on the Canadian/Vancouver Stock Exchange. The funds solicited during the promotion of Norcross and Rover Resources — totaling approximately $250,000 — were deposited into three trust accounts maintained by Wood. These funds, however, never made it to Canada. Rather, Wood converted these investors’ funds to his own use and lost them playing the commodities futures market.

In 1986, the State of Montana charged Wood with various securities fraud and related crimes stemming from these transactions. Wood pleaded guilty to three selected counts pursuant to a plea agreement; imposition of sentence was deferred for a period of six years on the condition, among others, that he pay restitution to the Montana residents who purchased stock in Nor-cross or Rover Resources.…