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Smith County man sentenced for using stolen valor to defraud investors

TYLER, Texas – A Tyler man has been sentenced to more than 11 years in federal prison for multiple violations in the Eastern District of Texas, announced U.S. Attorney Damien M. Diggs today.

 

Derek Robert Hamm, 39, pleaded guilty to wire fraud, money laundering, violating the Stolen Valor Act, using a fraudulent military discharge certificate, and being a felon in possession of firearms and ammunition.  Hamm was sentenced to 135 months in federal prison on Dec. 7, 2023, by U.S. District Judge J. Campbell Barker.  Hamm’s sentence was the largest ever imposed in relation to a fraud scheme involving the Stolen Valor Act.

 

The Stolen Valor Act of 2013 makes it illegal to fraudulently wear medals, embellish rank, or make false claims of military service to obtain money, employment, property, or some other tangible benefit.  As part of his sentence Hamm agreed to pay restitution of at least $2.3 million and forfeiture of the proceeds of his criminal conduct, including jewelry, automobiles, and cash proceeds in the amount of $1,675,000.

 

According to court documents, Hamm invented a persona of being a wealthy and successful war hero.  Hamm held himself out to be a former member of the Army Special Forces who had served multiple tours of duty in Iraq, Afghanistan, and other countries.  He claimed to have been awarded a Purple Heart, Bronze Star, Silver Star, and Distinguished Service Cross for his service.  Hamm also represented that he was related to Harold Hamm, the billionaire oilman in Oklahoma, which he claimed gave him access to financial resources and oil industry expertise.  Through this larger-than-life persona, Hamm created an extensive network of friends who introduced him to potential investors.  Those investors believed Hamm’s claims and invested in what they expected to be worthwhile ventures spearheaded by a trustworthy and capable entrepreneur.

 

In reality, Derek Hamm was nothing of the sort.  Hamm was not a decorated war hero.  He was no oil industry tycoon.  He was not related to Harold Hamm.  He did not spend investors’ funds on the latest oil industry technology or new oil wells.  Within hours of receiving investors’ funds, Hamm spent their money on himself and his family, including expensive jewelry, vehicles, and vacations to expensive resorts on private charter planes.  All the while, Hamm represented to investors that he had invested their money in successful oil industry projects.  He continued to pump investors to keep sending him money even as their investments failed to produce any returns.

 

“As the son of a veteran, I have a deep appreciation for the importance of military service and recognizing the valor of our servicemen and women,” said U.S. Attorney Damien M. Diggs.  “The Stolen Valor Act protects and honors veterans and the sacrifices they’ve made to our country.  When people make false claims of military heroism, they diminish the true acts of bravery and heroism that Americans celebrate and tribute.  Stolen valor is an insult to all those who stood in harm’s way and earned their decorations.  By using stolen valor to steal from people, Hamm preyed on the victims’ love of this country and their reverence for American heroes who earned such real military awards through their sacrifices to this country.”

 

“The defendant invented a successful and noble persona to disguise his failed business and dishonest intentions in order to steal millions of dollars from unsuspecting investors. In addition to pretending to be an American hero, he was found to be in possession of dozens of firearms which was prohibited due to his criminal background. Mr. Hamm could not stop breaking the law,” said Dallas FBI Special Agent in Charge Chad Yarbrough. “I am proud that we can work with our partners at the U.S. Attorney’s Office to uphold the Stolen Valor Act and ensure that courageous attribution stays with our nation’s bravest defenders.”

 

Hamm also pleaded guilty to being a prohibited person in possession of firearms and ammunition.  Hamm was convicted in Smith County in 2020 for theft of property, a state felony.  As a felon, Hamm is prohibited by federal law from owning or possessing firearms or ammunition. According to court documents, Hamm was in possession of dozens of firearms, including several rifles with high-capacity magazines, and ammunition for those firearms.  Because of his arsenal of weapons and his trained-warrior persona, Hamm scared any investors from pressing him on his failed investments.

 

Through its investigation, the government learned that this was not the first time that Hamm had used stolen valor for his own personal benefit.  In 2020, Hamm presented falsified military records to a Smith County, Texas District Court, which he successfully leveraged into a more lenient sentence.  Hamm had used those same false documents to obtain Bronze Star license plates from the Texas Department of Motor Vehicles.

 

After Hamm was indicted in January 2022, more than $350,000 worth of assets, including cash, vehicles, and jewelry, were seized pursuant to the Justice Department’s asset forfeiture procedures.  Those assets were sold prior to sentencing and were forfeited to the government.  Because Hamm  did not have enough other assets to pay anything towards the $2.3 million restitution judgment, the U.S. Attorney requested for the Justice Department’s Money Laundering and Asset Recovery Section (MLARS) to approve application of the forfeited assets to the restitution debt so that the forfeited funds could be paid to the victims.  MLARS expedited the U.S. Attorney’s request and approved it in a matter of days.

 

If you or someone you know has been a victim of Derek Robert Hamm, please contact the Federal Bureau of Investigation at 903-594-3503.  Derek Robert Hamm is also known as D. Wayne Hamm II, Wayne Hamm, D. Wayne H., DW Hamm, and RD Hamm.

 

This case was prosecuted as part of the Project Safe Neighborhoods Initiative.  Project Safe Neighborhoods is aimed at reducing gun and gang violence; deterring illegal possession of guns, ammunition, and body armor; and improving the safety of residents in the Eastern District of Texas. Participants in the initiative include community members and organizations as well as federal, state, and local law enforcement agencies.

 

This case was investigated by the Federal Bureau of Investigation’s Tyler Field Office, with assistance from the Tyler Police Department, the Smith County Sheriff’s Office, the Phoenix Arizona Police Department, Smith County Adult Probation, the Texas Railroad Commission-Enforcement Division, Department of Veteran’s Affairs-Office of Inspector General, Texas Comptroller of Public Accounts-Criminal Investigation Division, and the United States Army Special Operations Command. This case was prosecuted by Assistant U.S. Attorneys Robert Austin Wells and Ryan Locker.

 

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Davilyn Walston

Public Affairs Officer/Law Enforcement Coordinator

U.S. Attorney’s Office

Eastern District of Texas

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