Ex-Pittsburgher charged in $2M investment scam sent to federal prison

An ex-Pittsburgher and former investment broker who admitted his role in stealing more than $2 million through a sham energy company is going to federal prison.

Jonathan Freeze, 66, who pleaded guilty to one count of conspiring to commit mail and wire fraud last year, was sentenced in Pittsburgh on Wednesday to serve 27 months incarceration.

Freeze asked U.S. District Court Judge Robert J. Colville to allow him to self report, but the judge denied the request, and Freeze was taken into custody to begin serving his sentence immediately.

According to federal prosecutors, Freeze and two other men conspired between 2016 and 2018 to convince nearly two dozen investors to take out short-term loans with high interest rates to fund a fictional business, Alternative Energy Holdings LLC.

They told the victims the company was going to build a plant in South Carolina to convert biodegradable waste into green energy.

The scam netted $2,017,228, which the defendants used for personal expenses, including gambling, high-end clothing and meals out, prosecutors said.

They were charged in 2021.

Freeze, formerly of Pittsburgh, played the most prominent role in the scam, according to a sentencing memo filed in the case. He solicited previous clients from his work as an investment adviser and convinced them to put their money in the new venture.

“Many of these victims had known defendant Freeze for years, and had known him as a legitimate investment advisor, so they trusted him,” prosecutors wrote.

Several of his victims wrote to the court that they were embarrassed to have been scammed by Freeze.

A retired schoolteacher, who invested $30,000, wrote that she reminded Freeze that her investments needed to be conservative, and he agreed.

But when he contacted her in the fall of 2016, he told her it was a perfect opportunity.

“I was very unsure about doing this but he said if I invested $30,000 I would have a large return by the end of the year,” she wrote. “Throughout the last five years I have felt embarrassed and humiliated by my stupidity regarding this situation.”

The advisory sentencing guideline range called for 27 to 33 months in prison — the same sentence sought by prosecutors. However, the defense asked for probation, arguing that Freeze has mental illness that requires treatment.

“At no time did Mr. Freeze ever intend to permanently deprive the investors/lenders of their money,” wrote attorney Chris Rand Eyster. “In fact, Mr. Freeze always intended to pay full restitution to these individuals.”

The judge ordered Freeze to pay $1,837,228 in restitution.

One co-defendant in the case, Kevin Carney, of Euclid, Ohio, was ordered to serve 2½ years in federal prison in March, while the other co-defendant, Robert Irey, of Greene County, pleaded guilty but died before being sentenced.