Michael K. Wallens Sr.: Guilty Plea

Oct 19

Michael K. Wallens Sr. pleaded guilty to one count of securities fraud on Oct. 19 in U.S. District Court in Dallas.

Wallens and his associates collected more than $17 million from about 180 investors who bought Collateral Secured Debt Obligations issued by W Financial Group.

Wallens falsely told investors the debt obligations were backed by a reinsurance scheme and that their money would be held in cash, government or corporate bonds.

Wallens and two associates instead spent investors' money to purchase a used car dealership Wallens owned. They also used investors' money to buy residential lots and to invest in a home-building company and a power company.

Sentencing has not been set; Wallens faces a maximum sentence of five years in prison, a fine, and restitution.