Three Men Indicted for Defrauding Investors of $17 Million
| U.S. Attorney’s OfficeJune 25, 2015 |
Three men from Northeast Ohio were indicted in federal court for their roles in a conspiracy to defraud about 70 investors out of approximately $17 million, law enforcement officials said.
Indicted are Thomas Abdallah, 51, of Brunswick, Mark M. George, 58, of Independence, and Jeffrey L. Gainer, 51, of Akron.
The 12-count indictment was announced by Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Office, and Kathy Enstrom, Special Agent in Charge, IRS-Criminal Investigations, Cincinnati Field Office.
“This case is another sad reminder that so-called investment gurus who make promises of big guaranteed returns should send up red flags,” Dettelbach said. “If something seems too good to be true, it usually is.”
“These defendants callously preyed on the desires of many to make wise investments for a secure future and duped them out of their life savings,” Anthony said. “Fraudsters such as these remain a top priority of the FBI.”
“Financial fraud schemes are often described as a house of cards,” Enstrom said. “The underlying structure can fall apart at any time and expose the individuals responsible. Today’s indictment is just one step in holding accountable those who prey on investors for their personal financial gain.”
Kenneth A. Grant, Jerry A. Cicolani and Kelly C. Hood previously pleaded guilty to crimes related to this fraud.
Abdallah and Grant owned and operated KGTA Petroleum, Ltd. They and others marketed KGTA as a company that earned profits from buying and selling crude oil and refined fuel products. They represented to investors that they had relationships with third-party purchasers and investor funds would be used to purchase fuel products at a discount and then resold at substantial profit, according to the indictment.
KGTA issued investment agreements and promissory notes which offered guaranteed monthly payments up to five percent per month or annual payments of approximately 60 percent per year, according to the information. The defendants never filed documentation about KGTA with the Securities and Exchange Commission, according to the indictment.
Together, they obtained approximately $31 million from about 70 investors between 2010 and 2014 through false and fraudulent pretenses. They knew KGTA did not have agreements in place to sell oil and fuel, and that investors would not earn 5 percent per month on their investments, according to the indictment.
The defendants used investor money for personal expenditures and luxury items including a Mercedes Benz, a boat and mortgage payments on high-end residential property. As a result of the conspiracy, the defendants defrauded the investors out of approximately $17 million, according to the indictment.
This case is being prosecuted by Assistant U.S. Attorneys Mark S. Bennett and M. Kendra Klump following an investigation by the Federal Bureau of Investigation and Internal Revenue Service—Criminal Investigations.
If convicted, the defendants’ sentences will be determined by the court after a review of the federal sentencing guidelines and factors unique to the case, including the defendant’s prior criminal record (if any), the defendant’s role in the offense and the characteristics of the violation.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
This content has been reproduced from its original source.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.