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California Man Pleads Guilty to Misappropriating COVID-19 Funds

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Administrator
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covid recession

A California man pleaded guilty this week in the Central District of California to stealing government funds designed to aid medical providers in the treatment of patients suffering from COVID-19 and using them for his own personal benefit.

According to court documents, Grigor Garibyan, 36, of North Hollywood, admitted that he owned GMA Home Health Inc. (GMA), a home health agency in Van Nuys, which closed around June 2019. GMA, which was never operational during the COVID-19 pandemic, received approximately $57,591 designated for the medical treatment and care of COVID-19 patients. Garibyan admitted he stole the funds by transferring and spending them for his own personal use, rather than using the funds in conjunction with pandemic relief efforts as required.

Garibyan pleaded guilty to two counts of theft of government property. He is scheduled to be sentenced on June 16 and faces up to 10 years in prison for each count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The charges against Garibyan resulted from his intentional misuse of funds distributed from the CARES Act Provider Relief Fund, money specially apportioned by the CARES Act to help health care providers who were financially impacted by the COVID-19 pandemic, to provide care to patients who were suffering from COVID-19, and to compensate providers for the cost of that care. These funds were critical to delivering relief to health care providers and maintaining access to medical care during the pandemic.

Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division; U.S. Attorney Tracy L. Wilkison for the Central District of California; and Special Agent in Charge Timothy B. Francesca of the U.S. Department of Health and Human Services Office of Inspector General’s Los Angeles Regional Office made the announcement.

Trial Attorney Chris Wenger and Senior Litigation Counsel Jim Hayes of the National Rapid Response Strike Force of the Criminal Division’s Fraud Section are prosecuting the case.

On May 17, 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to marshal the resources of the Department of Justice in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts. For more information on the department’s response to the pandemic, please visit https://www.justice.gov/coronavirus.

Anyone with information about allegations of attempted fraud involving COVID-19 can report it by calling the Department of Justice’s National Center for Disaster Fraud (NCDF) Hotline via the NCDF Web Complaint Form at https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.

Press release distributed by the DOJ.

Two Defendants Plead Guilty in a Nationwide Racketeering Conspiracy Targeting the Elderly

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Administrator
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San Diego (CA) – Two defendants charged in a nationwide “grandparent scam” have pleaded guilty to conspiracy charges under the Racketeer Influenced and Corrupt Organizations (RICO) Act.

Jack Owuor, 25, of Paramount, California pleaded guilty in federal court today. Timothy Ingram, 29, of North Hollywood, California, pleaded guilty on March 2, 2022.

According to court documents, the defendants were members and associates of a criminal enterprise that engaged in extortion and fraud to swindle more than $2 million from 70-plus elderly victims across the nation.  At least 10 elderly San Diego County residents lost more than $300,000 to the fraud.

From approximately November 1, 2019, until October 14, 2020, the members of the criminal enterprise targeted elderly Americans, contacting them by phone and feeding them phony stories that their grandchildren were in legal trouble and needed money to pay for bail, pay medical expenses for car accident victims, or prevent additional charges from being filed, according to court documents. Members and associates obtained money from victims through in-person cash pick-ups, by mail or commercial carriers, or via wire transfers.  Conspirators laundered the proceeds by transferring the funds or converting from fiat currency to cryptocurrency.

Ingram admitted in his plea agreement that he organized the criminal activity of at least five other participants, including codefendants Anajah Gifford and Jack Owuor.  Ingram admitted that he recruited mules to receive transfers of money from victims, and to pick up cash from victims in California and elsewhere.  As part of the guilty plea, Ingram agreed to forfeit $124,700 in proceeds from the offense.  Ingram will also be subject to an order of restitution to the victims of the offense in the amount of at least $1,932,507.93.

Owuor admitted in his plea agreement that he conducted cash pick-ups from victims under Ingram’s direction, and later recruited women to pick up cash.  In their phone messages, Ingram and Owuor discussed using female mules for cash pick ups to make “it more smooth.”  As part of his guilty plea, Owuor agreed to forfeit $4,300 in proceeds he personally received from the offense, and pay at least $434,600 to the victims in restitution.

This case was investigated by the San Diego Elder Justice Task Force, which is a collaboration between the U.S. Attorney’s Office, the FBI, the District Attorney’s Office and all San Diego County law enforcement agencies. The Elder Justice Task Force was established in February 2021 and is believed to be the first comprehensive law enforcement effort for this purpose anywhere in the country. The case was prosecuted by the U.S. Attorney’s Office and the Department of Justice’s Consumer Protection Branch.

“These defendants exploited the sacred bond between grandparent and grandchild and left many victims financially and emotionally traumatized,” said U.S. Attorney Randy Grossman. “We will vigorously investigate and bring to justice those who prey on the elderly.” Grossman thanked the prosecution team, the Department of Justice’s Consumer Protection Branch and members of the San Diego Elder Justice Task Force for their excellent work on this case.

“The Department of Justice’s Consumer Protection Branch will pursue and prosecute individuals who systematically target elderly Americans by preying on their concern for loved ones,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “We are grateful to our partners at the U.S. Attorney’s Office for the Southern District of California and the FBI for their work to advance the department’s efforts against organized elder fraud, and to the San Diego County District Attorney’s Office.”

“These guilty pleas are a prime example of the collaboration and coordination among our local, state, and federal partners who make up San Diego’s Elder Justice Task Force, and the great work being done to protect our elderly population,” said FBI Special Agent in Charge Suzanne Turner. “The task force is committed to aggressively pursuing criminal organizations who prey on our senior citizens, and will utilize all available investigative means to bring them to justice. I would also like to thank the FBI’s Los Angeles Field Office for their continued support in this case.”

As of today, four of the eight defendants charged in the case are pending trial. Two defendants are fugitives and remain at large.

Press Release distributed by the DOJ.

Hadari Oshri deactivates LinkedIn account following PPE exposé

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Editor
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AN IMPORTANT NOTE: On June 22, 2021, Hadari Oshri –Marc Lubaszka’s business partner– filed a frivolous civil harassment restraining order (CHRO) against Investor News reporter Aitana Vargas to stop the publication of her investigative series “A Special Report: The Harrowing Impunity of White-Collar crime,” and any subsequent installments or future media coverage. On August 3, 2021, Vargas filed an anti-SLAPP motion to strike Oshri’s CHRO petition. In a hearing held on September 13, 2021, Los Angeles Superior Court Judge Doreen Boxer granted Vargas’s anti-SLAPP motion and denied Oshri’s civil harassment petition for failure to sustain the applicable burden of proof. Oshri will now have to pay Vargas’s attorney’s fees for filing a frivolous case. The Israeli entrepreneur also declined to go on a recorded interview or provide statements via email. This outlet has striven to reach out to sources to ensure they have the opportunity to provide their own account of events.

California – Israeli entrepreneur Hadari Oshri has deactivated her LinkedIn account after Investor News broke an investigative story exposing her alleged participation in a joint PPE scheme with broker Marc Lubaszka.

Oshri’s LinkedIn account was one of several sources of misrepresentation of her professional success and experience as a businesswoman.

Prior to her account’s deactivation, Oshri had made multiple false statements, including that she was a “Strategic Partnerships and Investments Executive” with startup 2030.io in the UK ––a misrepresentation that she also featured on her Twitter account for several months.

In an email to this outlet, the company denied any relationship or knowledge of Oshri and requested that she remove all information relating to 2030.io from her social media accounts. Eventually, Oshri deleted any reference to 2030.io.

hadari oshri ponzi scheme
For months, Hadari Oshri claimed on her Twitter account that she was part of 2030.io. The company has denied any links to Oshri.
A screenshot of Hadari Oshri’s LinkedIn account showing that she falsely stated that she had worked at 2030.io in the UK.

In her LinkedIn account, Oshri also represented herself as the Managing Partner of Trade Safe Pro, LLC, which has been involved in the sales of PPE on Facebook Marketplace.

Hadari Oshri took to social media to sell PPE amid the COVID-19 pandemic.

According to information that will soon be released by this outlet, Trade Safe Pro, LLC has engaged in multiple dubious business practices during the pandemic. Public records show that the company is linked to a luxurious beachfront Malibu property.

This condo is also listed as the registration address for A1A Management, Inc., a Montana company whose principals are Oshri and former fashion model Patrick Seller, according to public records. Seller did not respond to multiple media requests and blocked Investor News contributor Aitana Vargas on social media after she sought comments from him. In his LinkedIn account, Seller claims to have mentored or to be in “business” with 21-year-old rapper Dylan Raw (Raw Affiliation), who was featured in “A Special Report: The Harrowing Impunity of White-Collar Crime,” acted as the VP of Fly Private X and is the principal of Buy Gold Brightly, Lubaszka’s latest gold venture.

Hadari Oshri and Patrick Seller are listed as principals of A1A Management, Inc., a company registered in Montana linked to a luxurious Malibu property.

A previous story released by Investor News earlier this year linked Oshri to an alleged PPE scheme involving convicted fraudster Arael Doolittle and former Aurum Advisors CEO Marc Lubaszka.

Hadari Oshri PPE hoarding
In 2021, Hadari Oshri tried to sell PPE on Facebook Marketplace.

In an attempt to stop the publication of Vargas’s full investigative series, Oshri filed a frivolous restraining order against the news correspondent in June 2021. The judge ruled against Oshri in September last year, and the entrepreneur will have to pay mandatory attorney’s fees to the reporter. A $23K award in legal fees is expected soon.

On March 31, 2022, Oshri re-activated her LinkedIn account, which does not list conman Marc Lubaszka’s Fly Private X as one of the companies she worked for.

This is a developing story and will be updated as more information comes in.

RELATED COVERAGE

Have you been SLAPPED? Contact the newsroom and share your story with us at info@investornews.io

Read Hadari Oshri loses anti-SLAPP court battle against journalist Aitana Vargas.

Read Hadari Oshri’s losses mount up as she fails again to silence her victims.

Read The Legal Bullies Club – The SLAPPers: Featuring Hadari Oshri.

Read La periodista Aitana Vargas pide $23.000 en honorarios tras pulverizar la querella mordaza de Hadari Oshri.

Read “A Special Report: The Harrowing Impunity of White-Collar Crime (Part I): Marc Lubaszka, the ultimate white-collar conman on the run: From a Hollywood Hills mansion to Venezuela’s illegal gold mines and back.” 

Read “A Special Report: The Harrowing Impunity of White-Collar Crime (Part II): Marc Lubaszka’s nonexistent private jets failed to deliver PPE amid the COVID-19 pandemic.”

Read “A Special Report: The Harrowing Impunity of White-Collar Crime (Part III): Pursuing flash money, rapper Dylan Raw partners with conman Marc Lubaszka and becomes his patsy.”

Read “A Special Report: The Harrowing Impunity of White-Collar Crime (Part IV): Hadari Oshri allegedly linked to attempted $370M nonexistent PPE COVID-19 scheme.”

Last update on March 31, 2022.

SEC Charges Siblings in $124 Million Crypto Fraud Operation that included Misleading Roadshows, YouTube Videos

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Administrator
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KaratCoin Cryptocurrency

Washington D.C., March 8, 2022 — The Securities and Exchange Commission today charged siblings John and JonAtina (Tina) Barksdale with defrauding thousands of retail investors out of more than $124 million through two unregistered fraudulent offerings of securities involving a digital token called “Ormeus Coin.”

According to the SEC’s complaint, from June 2017 through the present, the Barksdales offered and sold Ormeus Coin to investors on crypto trading platforms. In addition, from June 2017 to April 2018, through a multi-level marketing business called Ormeus Global, the Barksdales offered and sold subscription packages that included Ormeus Coin and an investment in a crypto trading program. As alleged, to promote the offerings, John Barksdale held roadshows around the world while he and his sister, Tina, led the production of social media posts, YouTube videos, press releases, and other promotional materials. The complaint alleges that at the events, in the produced materials, and currently on Ormeus Coin’s website, the defendants falsely claimed that Ormeus Coin was supported by one of the largest crypto mining operations in the world, even though they abandoned their mining operations in 2019 after generating less than $3 million in total mining revenue.  As alleged, in many of these investor communications, the defendants falsely stated that Ormeus Coin had a $250 million crypto mining operation and was producing $5.4 million to $8 million per month in mining revenues.

According to the complaint, to preserve the fiction that Ormeus Coin was successfully mining crypto, the Barksdales arranged for a public website to display a wallet of an unrelated third party showing more than $190 million in assets as of November 2021, even though the Ormeus wallets were worth less than $500,000. The complaint also alleges that the Barksdales manipulated Ormeus Coin’s price and misused millions of dollars of investor funds for personal expenses.

“We allege that the Barksdales acted as modern-day snake-oil salesmen, using social media, promotional websites, and in-person roadshows to mislead retail investors for their own personal benefit,” said Melissa Hodgman, Associate Director in the SEC’s Division of Enforcement. “We will continue to vigorously pursue persons who sell securities in schemes to defraud the investing public no matter what label the promoters apply to their products.”

The complaint, filed in the U.S. District Court for the Southern District of New York, charges the Barksdales with violating the federal securities laws and seeks injunctive relief, disgorgement plus interest, and civil penalties.

In a parallel action, the U.S. Attorney’s Office for the Southern District of New York unsealed criminal charges against John Barksdale.

The SEC’s Office of Investor Education and Advocacy cautions investors to be wary of potential crypto investment scams and of investing based on social media.

The SEC’s investigation was conducted by Matthew B. Reisig under the supervision of Timothy England and Melissa Hodgman. Melissa Armstrong and Fred Block will lead the litigation.

Press release distributed by the SEC.

Two Florida Tax Preparers Sentenced to Prison

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Administrator
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"From Cash To Digital" by FamZoo is marked with CC BY-SA 2.0.

Fraudulently Claimed Nearly $3 Million in Refunds

Two Florida tax preparers were sentenced to prison yesterday for conspiring to defraud the United States and preparing false tax returns.

Nikency Alexis, the owner and operator of Unity Tax & Financial Services (Unity Tax), a Broward County tax preparation business, was sentenced to 45 months  in prison, and Thony Guillaume, who worked as a return preparer at Unity Tax, was sentenced to 40 months in prison. According to court documents, from 2011 through 2016, Alexis and Guillaume conspired to defraud the IRS by preparing returns for clients that claimed fictitious business and education expenses the clients never incurred. After learning about the criminal investigation, Alexis and Guillaume continued to file false returns and concealed their involvement in the filing of those returns by listing other individuals as the paid preparers. In total, Alexis and Guillaume sought more than $2.8 million in fraudulent refunds from the IRS.

In addition to the terms of imprisonment, U.S. District Judge Raag Singhal ordered Alexis to serve three years of supervised release and to pay approximately $464,006 in restitution to the IRS. The judge ordered Guillaume to serve three years of supervised release and to pay approximately $221,823 in restitution to the IRS.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida made the announcement.

IRS-Criminal Investigation investigated the case.

Trial Attorney Matthew Hicks of the Justice Department’s Tax Division and Assistant U.S. Attorney Deric Zacca for the Southern District of Florida prosecuted the case.

Press release distributed by the DOJ.

Featured image: “From Cash To Digital” by FamZoo is marked with CC BY-SA 2.0.

SEC Charges Company and CEO for COVID-19 Scam

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Administrator
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Washington D.C., April 28, 2020 — The Securities and Exchange Commission today announced charges against Praxsyn Corp. and its CEO for allegedly issuing false and misleading press releases claiming the company was able to acquire and supply large quantities of N95 or similar masks to protect wearers from the COVID-19 virus. The SEC previously issued an order on March 26 temporarily suspending trading in the securities of Praxsyn. 

According to the SEC’s complaint, Praxsyn, which is purportedly based in West Palm Beach, Florida, issued a press release on Feb. 27 stating that it was negotiating the sale of millions of N95 masks and “evaluating multiple orders and vetting various suppliers in order to guarantee a supply chain that can deliver millions of masks on a timely schedule.” On March 4, Praxsyn issued another press release claiming it had a large number of N95 masks on hand and had created a “direct pipeline from manufacturers and suppliers to buyers” of the masks. Praxsyn’s CEO Frank J. Brady was quoted in the release as telling any interested buyers that the company was accepting orders of a minimum of 100,000 masks. Despite these claims, according to the complaint, Praxsyn never had any masks in its possession, any orders for masks, or a single contract with any manufacturer or supplier to obtain masks. After regulatory inquiries, Praxsyn issued a third press release on March 31 admitting that it never had any masks available to sell.

“As alleged in the complaint, in the midst of the ongoing COVID-19 pandemic, Praxsyn and Brady sought to exploit unsuspecting investors by issuing false and misleading press releases concerning Praxsyn’s ability to source and supply N95 masks for the COVID-19 virus,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.

“Today’s fraud action against Praxsyn and its CEO demonstrates the SEC’s dedication to investor protection and accountability,” said Steven Peikin, Co-Director of the SEC’s Division of Enforcement. “We will move swiftly against those who seek to profit off this national emergency by cheating or misleading investors.”

“The Enforcement Division is committed to swiftly shutting down COVID-19 investment scams, seeking trading suspensions where appropriate, and pursuing fraud charges against both entities and individuals when warranted,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement.

Read the complaint for injunctive and other relief here.

The SEC’s complaint, filed in federal court in the Southern District of Florida, charges Praxsyn and Brady with violating antifraud provisions of the federal securities laws, and seeks permanent injunctive relief and civil penalties. The SEC also seeks an officer and director bar against Brady.

The SEC’s investigation, which is ongoing, has been conducted by the Microcap Fraud Task Force and supervised by Elisha L. Frank and Glenn S. Gordon. Robert K. Levenson is leading the SEC’s litigation under the supervision of Andrew O. Schiff. The SEC appreciates the assistance of the Financial Industry Regulatory Authority (FINRA).

The SEC’s Office of Investor Education and Advocacy previously issued an investor alert cautioning investors to be aware of COVID-19 scams.

Press release distributed by the SEC.

SEC Charges Venture Capital Fund Adviser with Misleading Investors

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Administrator
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"Cash" by bfishadow is marked with CC BY 2.0.

Alumni Ventures Group, LLC Repays $4.7 Million

Washington D.C. — The Securities and Exchange Commission today charged venture capital fund adviser Alumni Ventures Group, LLC (AVG) with making misleading statements about its management fees and engaging in inter-fund transactions in breach of fund operating agreements. The SEC also charged AVG’s CEO, Michael Collins, with causing AVG’s violations. To settle the charges, AVG repaid $4.7 million to affected funds and agreed to pay a $700,000 penalty, whereas Collins agreed to pay a $100,000 penalty.

According to the SEC’s order, AVG’s website and other marketing communications represented that its management fee for the venture capital funds that it managed was the “industry standard ‘2 and 20.’” The order found that these representations were misleading because they led some investors to believe that AVG would collect a two-percent management fee during each year of its funds’ 10-year term, and separately collect a 20-percent performance fee. According to the order, AVG’s typical practice was instead to assess management fees totaling 20 percent of an investor’s fund investment (representing ten years’ of two-percent annual management fees) upon the investor’s initial fund investment.

The order found that Collins approved of AVG employees using the “industry standard ‘2 and 20’” language and personally used it with fund investors and prospective investors. The order also included findings that AVG made inter-fund loans and cash transfers between funds and made loans to certain funds in violation of the funds’ respective operating agreements.

“Venture capital fund advisers, like all advisers to funds, must accurately describe their fees and abide by the funds’ agreements,” said Adam S. Aderton, Co-Chief of the SEC Enforcement Division’s Asset Management Unit. “When appropriate, enforcement actions like this one hold firms accountable when they fail to meet these obligations.”

AVG and Collins consented to the entry of the SEC’s order finding that AVG violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8, and that Collins caused AVG’s violations. Without admitting or denying the SEC’s findings, AVG and Collins agreed to a cease-and-desist order, AVG agreed to a censure and to pay a $700,000 penalty, and Collins agreed to pay a $100,000 penalty.

The SEC’s investigation was conducted by Luke Pazicky and Michael Moran, and was supervised by David Becker, all within the Enforcement Division’s Asset Management Unit.  The SEC appreciates the assistance of the New Hampshire Bureau of Securities Regulation and the Massachusetts Securities Division.

Press release distributed by the SEC.

Featured image: “Cash” by bfishadow is marked with CC BY 2.0.

City National Rochdale to Pay More Than $30 Million for Undisclosed Conflicts of Interest

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Administrator
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"Investing" by 401(K) 2013 is marked with CC BY-SA 2.0.

Harmed Investors to Receive Amounts Recovered

Washington D.C., — The Securities and Exchange Commission today announced that registered investment adviser City National Rochdale, LLC (CNR) has agreed to pay more than $30 million to settle charges that its undisclosed conflicts of interest defrauded current and prospective clients. The money CNR pays will be placed into an SEC Fair Fund for distribution to harmed investors.

According to the SEC’s Order, from at least 2016 through 2019, CNR, which has discretionary authority over client accounts, failed to inform its clients of its practice of investing their assets in proprietary mutual funds that generate fees for CNR and its affiliates, rather than in competitor funds whose fees may be lower. Additionally, the SEC’s Order finds that from at least 2016 until 2019, CNR failed to inform some prospective clients that they could invest in CNR’s proprietary funds at lower cost. Clients who opened accounts with certain CNR affiliates did not pay annual marketing or distribution fees, known as 12b-1 fees, but most clients who invested with CNR through their own financial advisors did.

“CNR’s failures to disclose its conflicts of interest deprived clients of their ability to make informed investment decisions while generating fees for the adviser and its affiliates,” said Melissa Hodgman, Associate Director of the SEC Enforcement Division. “When investors entrust their hard-earned money with an adviser, it is crucial they receive full and fair disclosures to allow them to understand and reject any conflicts of interest, and if the adviser does not abide by these rules, then the SEC will hold them accountable so we can return that money to investors.”

The SEC’s Order finds that CNR violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-7 thereunder. Without admitting or denying the SEC’s findings, CNR agreed to cease and desist from committing or causing any future violations of these provisions; be censured; provide notice of the settlement to affected advisory clients; retain an independent compliance consultant; and pay disgorgement, prejudgment interest, and a civil penalty totaling $30,361,803 that will be distributed to investors through a Fair Fund.

The SEC’s investigation was conducted by Elisabeth M. Grimm and supervised by Rami Sibay.

Press release distributed by the SEC.

Featured image: “Investing” by 401(K) 2013 is marked with CC BY-SA 2.0.

District Attorney Gascón Warns Consumers About COVID-19 Scams

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Administrator
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"MTA Deploys PPE Vending Machines Across Subway System" by MTAPhotos is marked with CC BY 2.0.

District Attorney George Gascón released two public service announcements today warning people to beware of scams based on the increased demand for COVID-19 testing.

“The best way to protect consumers is with knowledge. My goal is to give consumers the information they need to avoid becoming victims,” said District Attorney Gascón. “These crimes are particularly egregious because fake COVID-19 tests and testing sites put everyone’s health at risk.”

District Attorney Gascón warned that fake and unauthorized at-home COVID-19 test kits are being sold online. These kits produce false results that may have adverse consequences for not just the people who use them but also for their family members, friends and communities.

He suggested taking the following steps to avoid becoming a victim of this crime:

  • Visit FDA.gov for a list of approved test kits.
  • Buy test kits with a credit card so you may dispute a fraudulent charge.
  • Do a web search on the company selling the kit using words such as “scam.”

District Attorney Gascón also warned residents about fake COVID-19 testing sites, which may look very real. They are set up to steal personal identifying information or money from consumers without ever providing test results.

For consumer safety, he advised:

  • Never give your Social Security or passport number to get a COVID-19 test. It’s not required.
  • Use testing sites listed on a health department website or get a referral from a trusted source.

Watch Fraud Alert about Fake COVID19 Test Kits

Watch Fraud Alert about Fake COVID19 Test Sites 

Follow @LADAOffice on Twitter and Instagram for up-to-date news.

Featured image: “MTA Deploys PPE Vending Machines Across Subway System” by MTAPhotos is marked with CC BY 2.0.

Three Men Guilty in Scheme to Defraud Elderly and Vulnerable Victims of More Than $5 Million

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Administrator
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"Money Roll - $100 Dollar Bills" by 401(K) 2013 is marked with CC BY-SA 2.0.

United States Attorney Leonard C Boyle, Inspector in Charge Ketty Larco-Ward of the U.S. Postal Inspection Service’s Boston Division, and J. Russell George, the Treasury Inspector General for Tax Administration, announced that a federal jury in Bridgeport has found three men guilty of offenses related to their participation in lottery and romance scams that defrauded primarily elderly victims across the country of millions of dollars.

Yesterday, after a week-long trial before U.S. District Judge Stefan R. Underhill, FAROUQ FASASI, 27, RODNEY THOMAS, JR., 31, and RALPH PIERRE, 32, all formerly of New Haven, were convicted of conspiracy, fraud and money laundering offenses.

According to the evidence presented during the trial, in a lottery scam, scammers notify victims by telephone, through online communications, or by mail, that they have won the lottery.  The victims are then told that in order to collect the prize they must pay fees for things like taxes, shipping and processing. Often, once a victim sends a small amount of money, a scammer will ask for larger sums of money with a promise of more winnings.  The victims never receive winnings.  In a romance scam, scammers take advantage of people looking for companionship by pretending to be prospective companions.  Scammers typically create fake online profiles on dating websites that include false personal details such as the death of a spouse, or military service, to lure victims to trust them.  Once they have gained the trust of victims, scammers will ask victims for money, falsely claiming to need money for medical or business emergencies, for travel to see the victim, or other purposes.

Between approximately August 2015 and March 2020, Fasasi, Thomas and others used lottery scams, romance scams and other fraudulent means to induce elderly victims to provide them with money, gifts and personal details.  Victims sent cash, money orders or checks through the mail to various addresses in Connecticut, and also wired or deposited money into bank accounts in Connecticut controlled by conspiracy members and their associates.

Fasasi, Thomas, Pierre and other co-conspirators lived together for a time at a residence on Sherman Avenue in New Haven, where many packages containing cash, checks and money orders from victims were delivered.  To help launder the money obtained from fraud victims, Pierre formed a fake charity, called “Global Protection Foundation,” and opened four bank accounts in the fake charity’s name.

The investigation revealed that these scams defrauded more than 200 victims across the U.S. of more than $5 million.  Many of the victims were elderly and vulnerable, and some victims lost their life savings.  One Connecticut victim lost more than $1 million.

The jury found Fasasi and Thomas guilty of one count of conspiracy to commit mail and wire fraud, one count of conspiracy to commit money laundering, and one count of mail fraud.  Fasasi was also found guilty of three counts of money laundering.  Pierre was found guilty of one count of conspiracy to commit money laundering and one count of money laundering.  Judge Underhill scheduled sentencing for May 10.

Three other individuals have been charged and convicted of offenses stemming from their participation in this scheme.

“The Justice Department is committed to rooting out and prosecuting those who steal from seniors and other vulnerable victims,” said U.S. Attorney Boyle.  “These verdicts will help to heal the many individuals who gave thousands of dollars to these predators.  I encourage all to resist falling victim to these schemes and not send any money to anyone you haven’t met in person.  Instead, call your local police department, or 833-FRAUD-11, for assistance and to report these crimes.”

“The verdicts exemplify the U.S. Postal Inspection Service’s dedication to protecting those who have been victimized by scams that utilize the U. S. Mail to perpetuate fraud,” said Ketty Larco-Ward, Inspector in Charge of the U.S. Postal Inspection Service, Boston Division.  “The financial loss suffered by some of our most vulnerable population is devastating, often unrecoverable.  The teamwork exhibited between multiple federal law enforcement agencies ensured the success of this investigation.”

The Justice Department has established a National Elder Fraud Hotline to provide services to seniors who may be victims of financial fraud.  The Hotline is staffed by experienced case managers who can provide personalized support to callers.  Case managers assist callers with reporting the suspected fraud to relevant agencies and by providing resources and referrals to other appropriate services as needed.  When applicable, case managers will complete a complaint form with the Federal Bureau of Investigation Internet Crime Complaint Center (IC3) for Internet-facilitated crimes and submit a consumer complaint to the Federal Trade Commission on behalf of the caller.  The Hotline’s toll free number is 833-FRAUD-11 (833-372-8311).  For more information, please visit: https://ovc.ojp.gov/program/stop-elder-fraud/providing-help-restoring-hope.

This matter is being investigated by the U.S. Postal Inspection Service, Treasury Inspector General for Tax Administration (TIGTA), U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), U.S. Secret Service, U.S. Army-CID, and New Haven Police Department.  The case is being prosecuted by Assistant U.S. Attorneys Heather L. Cherry and Stephanie T. Levick.

Press release distributed by the U.S. Secret Service.

Featured image: “Money Roll – $100 Dollar Bills” by 401(K) 2013 is marked with CC BY-SA 2.0.

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