CALIFORNIA RESIDENT CONVICTED OVER $ 8 MILLION BUSINESS BUSTOUT SCHEME
The US Attorney’s office in Los Angeles announced on July 25 the conviction of Reza Bahram Tabatabai, a resident of Beverly Hills, California, on charges of conspiracy, seven counts of interstate transportation of fraudulently-obtained property, six counts of mail fraud, eight counts of wire fraud, conspiracy to launder money, and 33 counts of money laundering.
Tabatabai was a key figure in a fraud ring which had been accused of operating a business bust-out scheme in California, Atlanta, and possibly other locations. In an example described by the US Attorney’s statement, Tabatabai and his associates used assumed names to obtain control of a Norcross, Georgia company called Impaq Micro, a computer wholesaler.
The case alleged that, as part of the takeover agreement, the former owners of Impaq Micro were barred from disclosing the change of the company’s ownership to its vendors. Meanwhile Tabatabai and his associates arranged for new credit lines for Impaq Micro, then used these to buy large quantities of merchandise which they had shipped to a warehouse in California, then sold off for cash without repaying the credit line they had used to make the purchases.
Evidence at Tabatabai’s trial reportedly revealed an elaborate network of bank accounts in the names of sham businesses with names like Tsunami Corporation, DT&M, and Channel Islands/Surfside, controlled by the ring which were used to shuffle around and conceal the millions of dollars of cash proceeds of their scheme. When the group could obtain no more credit through a real company such as Impaq Micro, they abandoned the bankrupt company and defaulted on the credit lines they had obtained in its name.
According to the US Attorney’s July 25 statement, three other members of the bust-out ring previously pleaded guilty to fraud and money laundering charges. They include Edmond Masjedi of Beverly Hills, California; Touraj Benshian of Los Angeles; and Mohammad Majidi of Los Angeles. Two other defendants in the case – Masoud Sabet and Masoud Rahmani – were said to be fugitives who were believed to have fled to Iran.
NEW JERSEY RESIDENTS SENTENCED IN ELABORATE CREDIT SCAM AND BUST-OUT SCHEME CASE
The US Attorney’s office in Los Angeles announced on July 25 that Mi Suk Yi and her husband, Paul Amorello, were sentenced in federal court to 97 months and 135 months, respectively, in federal prison. Both are subject to a restitution order of $3,746,906 to victims of a scheme to obtain money using bogus checks and stolen identities. Both were convicted by a federal jury in 2005 on charges of conspiracy, bank fraud, and misuse of Social Security numbers. Amorello was also convicted on money laundering offenses.
Yi and Amorello had advertised in Korean-language media a service to help people with large debts obtain additional credit lines. After charging fees to the victims of this scheme, Yi and Amorello obtained blank checks from them which they used to pay down the credit lines of other victims and withdrew funds from these credit lines for their own use before the checks were returned. The couple had also used fake IDs to launder proceeds of their scheme in various bank accounts and structured their deposits into amounts less than $10,000 so that banks receiving these deposits would not file currency transaction reports as they are required to do for cash deposits in excess of $10,000.
According to the US Attorney’s July 25 statement, forfeiture proceedings were underway to obtain two New Jersey homes valued at over a million dollars which Yi and Amorello allegedly purchased with the proceeds of the scheme.
REPORT SAYS FORMER OKLAHOMA AIRCRAFT DEALER SENTENCED IN BANK FRAUD CASE
Graham Lee Kendall, the former president of Oklahoma City-based Oklahoma Aircraft Corporation, was sentenced in July to twenty-four months in federal prison and payment of $718,000 restitution after pleading guilty to a charge of bank fraud, say Florida news reports.
According to a July 14 report in the “Herald-Tribune,” a Florida newspaper, Kendall had been accused of defrauding lenders including First Priority Bank in Oklahoma City, which had loaned him money to buy airplanes for his business. Kendall then was said to have sold the planes that formed the collateral for these loans and tried to substitute documents on at least one other airplane that he didn’t own to get an additional loan.
MEMBERS OF COMMERCIAL LOAN FRAUD RING PLEAD GUILTY IN MASSACHUSETTS
The US Attorney’s office in Boston announced in June that guilty pleas were entered by five men who participated in a scheme to defraud commercial lenders of some $20 million by fraudulently obtaining equipment loans they had no intention of repaying.
The scheme centered around Peter Maggio of Medford, Massachusetts and his companies, Earth Site & Utility Company and Earth Management and Equipment Inc. Maggio had been accused of paying three individuals – Matt A. Havey, Louis Paradiso, and Sean Sacco – to pose as buyers of commercial equipment and to apply for financing for such purchases. The three straw buyers had no way to repay the funding they sought from lenders in Maine and New York, but provided false financial statements prepared by co-defendant William Howe, an accountant, and paid kickbacks to co-defendant Michael R. O’Neill, a manager at one of the lending companies.
Maggio had colluded with a Syracuse, New York construction equipment dealer, Jeffrey Deveau, who received part of the loan proceeds for helping Maggio arrange the fraudulent equipment loans. Maggio was also accused of fraudulently altering the titles to vehicles purchased with loan proceeds so these vehicles could be sold without the lenders’ knowledge.
Havey, Paradiso, Sacco, Howe, and O’Neill pleaded guilty in June to charges of conspiracy and mail fraud. All but Sacco also pleaded guilty to at least one count of wire fraud as well. Maggio and Deveau previously entered guilty pleas. Deveau was sentenced to one year and one day in prison, three years of supervised release, and payment of $15,655,000 of restitution.
RHODE ISLAND MAN SENTENCED IN RIVER CITY AFFILIATES ADVANCE FEE LOAN SCHEME
The US Attorney’s office in Providence announced on May 8 that John J. Conley of Cranston, Rhode Island, was sentenced to 21 months in prison and payment of restitution to victims of an advance loan fee scam he operated through several entities he controlled, including his River City Affiliates, which had advertised commercial financing in various financial publications.
Conley had claimed to control a hedge fund which could provide financing to small businesses. He obtained about $285,000 in advance fees from businesses seeking such loans.
For more information on the Conley scheme, see “Financial Crime News” story “Rhode Island Resident Pleads Guilty Over River City Affiliates Advance Loan Fee Scam,” April 25, 2006
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