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Saturday, March 28, 2015

DOJ ANNOUNCES CONVICTION OF OXYWATER MAKERS WITH FRAUD, MONEY LAUNDERING, TAX CRIMES

 FROM:  U.S. JUSTICE DEPARTMENT
Wednesday, March 25, 2015
Jury Convicts Makers of OXYwater for Wire Fraud, Money Laundering and Tax Crimes

Today, a federal jury convicted a man from Lewis Center, Ohio, and his business partner of Powell, Ohio, of defrauding their company’s investors and diverting investors’ funds for their own personal use.  Preston Harrison and his wife, Lovena E. Harrison, 42, were also both convicted of conspiracy to defraud the United States and filing a false income tax return, and Lovena Harrison was convicted of structuring financial transactions to evade currency reporting requirements.

Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division, U.S. Attorney Carter M. Stewart of the Southern District of Ohio, Special Agent in Charge Kathy Enstrom of Internal Revenue Service-Criminal Investigation (IRS-CI) and Special Agent in Charge Angela L. Byers of the FBI’s Cincinnati Field Division announced the verdict reached today, which was returned following a trial that began on March 16 before U.S. District Judge Gregory L. Frost.

According to court testimony, Thomas E. Jackson, 40, of Powell, and Preston J. Harrison, 43, of Lewis Center, operated Westerville, Ohio, based Imperial Integrated Health Research and Development LLC and developed a product called OXYwater, a beverage that promoters claimed was an all-natural, vitamin-enhanced sports drink that contained added oxygen for improved physical performance.

The defendants engaged in a scheme to deceive the investors in their company about the structure, composition, finances, sales and profits of OXYwater in order to make the company appear to be a lucrative and profitable financial investment.  Jackson and Harrison produced and sent false and fraudulent documents intended to deceive investors, the ultimate purpose of such false statements being for Jackson and Preston Harrison to obtain money invested in the company.  They then misappropriated that money for their own personal use and household expenditures including the purchase of jewelry, a Cadillac Escalade, a BMW, weapons, clothing, home improvements and a swimming pool.

“This case was about the millions of dollars that the defendants stole from investors to fuel their lavish lifestyle,” said Assistant U.S. Attorney Jessica Kim in court.

Jackson and Harrison misappropriated approximately $2 million of the investors’ funds between August 2010 and spring 2013.  The defendants’ scheme caused investors to suffer substantial losses when the corporation was forced to declare bankruptcy with no assets.  As a result of the defendants’ conduct, investors lost approximately $9 million.

Jackson and Preston Harrison were each convicted of one count of conspiracy to commit wire fraud, for which they face a statutory maximum sentence of 20 years in prison, and one count of conspiracy to commit money laundering, for which they face a statutory maximum sentence of 10 years in prison.  Jackson was convicted of eight counts of wire fraud, which carries a statutory maximum sentence of 20 years in prison, and 12 counts of money laundering, which carries a statutory maximum sentence of 10 years in prison.  Harrison was convicted of 12 counts of money laundering, for which he faces a statutory maximum sentence of 10 years in prison.

Preston and Lovena Harrison were both convicted of conspiracy to defraud the United States and with filing a false tax return.  Preston Harrison misappropriated approximately $1.1 million in 2011 from his company, which he and his wife, Lovena Harrison, placed in an account in the name of her daycare business.  They used the money for personal expenses and did not report the money as income on their 2011 income tax return.  Lovena Harrison was also convicted of one count of structuring financial transactions to evade currency reporting requirements.  Conspiracy to defraud the United States and structuring financial transactions to evade currency reporting requirements are each crimes with a statutory maximum sentence of five years in prison, and filing a false tax return carries a statutory maximum sentence of three years in prison.

Preston Harrison and Jackson also face potential forfeiture of $1.1 million, including two vehicles, eight weapons, cash and the contents of a bank account.

The three defendants were indicted by a grand jury on May 20, 2014.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Stewart commended the cooperative investigation by the IRS-CI and FBI, as well as Assistant U.S. Attorney Jessica Kim and Trial Attorneys Andrew Young and Jason Scheff of the Tax Division, who prosecuted the case.