Behind Bars, Still Running a Con: Inmate Convicted in $1.4 Million Fraud

BEAUMONT, Texas — A federal inmate previously convicted of fraud has been found guilty of participating in another scheme from behind bars, defrauding victims of more than $1.4 million.

Riley Graham, 60, also known as David Drake, was convicted October 15 of conspiracy to commit wire fraud after a five-day jury trial before U.S. District Judge Marcia A. Crone.

Federal prosecutors said the investment fraud operated between June 2019 and October 2024 while Graham was incarcerated at the low-security facility within Beaumont’s federal correctional complex.

Victims included a Beaumont pastor, the pastor’s family and owners of a North Carolina construction business. According to evidence presented in court, Graham conspired with others and targeted people he could reach while imprisoned, including a fellow inmate and that inmate’s family.

The investigation involved the FBI, IRS Criminal Investigation, Homeland Security Investigations and Bureau of Prisons. Assistant U.S. Attorneys John B. Ross and Chris Jackson prosecuted the case.

Graham faces a statutory maximum of 30 years in prison, a potential fine and restitution. Prosecutors said sentencing would follow completion of a presentence investigation; their October 16 announcement provided no hearing date.

The maximum penalty is not a prediction of the sentence Graham will receive. Federal sentencing requires the judge to consider the circumstances of the offense, the defendant’s background and applicable legal requirements.

According to the federal judiciary, probation officers prepare presentence reports to give judges a detailed account of the offense, criminal history, personal circumstances and financial condition. Those reports also address advisory sentencing guidelines and the impact on victims.

The defense and prosecution review the report for accuracy and can recommend changes. At sentencing, the judge considers the report alongside arguments from attorneys and statements from the defendant and, sometimes, victims.

For victims, the financial consequences remain an important part of that process. Federal authorities explain that victim impact statements allow people to describe how a crime affected them financially, emotionally and physically. Court-ordered repayment is known as restitution.

The case also leaves unanswered questions about how the scheme functioned inside a correctional institution. The announcement does not explain Graham’s communications methods, detail the investment promises or describe the roles of other participants.

Those gaps matter: the conviction establishes criminal responsibility, but the public summary offers only a limited picture of how the operation continued.

Sentencing will determine Graham’s punishment and any restitution obligations arising from the conviction.