BREAKING NEWS: California Man Expected To Enter Guilty Plea In Ponzi And Affinity-Fraud Scam; Kenneth Kenitzer May Face Up To 30 Years In Prison; Case Features Charge That A Vigilante Tried To Shake Down Business To Get Refunds For Investors
UPDATED 6:51 P.M. EDT (U.S.A.) Kenneth Kenitzer of Pleasanton has become the most recent senior citizen to face significant jail time for his actions in a Ponzi and affinity fraud scheme. The California Ponzi fleeced investors and churchgoers out of at least $40 million, authorities said.
Kenitzer, 66, is expected to plead guilty “in the near future”Â to wire fraud and money-laundering for his role in the alleged Equity Investment Management and Trading Inc. (EIMT) scheme, federal prosecutors said.
He faces up to 30 years in prison, but reportedly has agreed to cooperate with prosecutors, according to theÂ Pleasanton Weekly News.
Anthony Vassallo, a business partner of Kenitzer, was arrested in the case in March. Kenitzer was named in a civil complaint filed by the SEC, but was not immediately charged criminally.
Vassallo is 29.
Alleged Vigilante Seeking Refunds For Investors Charged
The EIMT case is notable for a reason that went beyond allegations of Ponzi and affinity fraud: an alleged shakedown attempt by a vigilante group to retrieve money for victims.
On March 18,Â federal prosecutors filed charges against Michael David Sanders, also known as David Dennis Sanders, for posing as a federal agent and “attempting to extort monies in connection with recovering funds for EIMT,” the SEC said.
Sanders, 41, of Fair Oaks, Calif., was charged with conspiracy, impersonating a federal agent and attempted extortion. The FBI described the alleged crime as an attempted shakedown after Sanders and others tried to force their will on two businessmen involved with EIMT.
“Upon entering the office suite, Sanders and several others displayed guns and handcuffs on their belts and wore bulletproof vests, radio earpieces, and badges on chains around their necks,” the FBI said in March.
“During the meeting, Sanders and the others with him falsely identified themselves as agents with the FBI, SEC, and the Attorney General and told the businessmen that ‘you can tell us to leave the office, but if we leave, you are leaving with us in handcuffs,'” the FBI said.
“When asked for their names and law enforcement credentials, Sanders and the others told the attendees to shut up and not ask questions. During the meeting, one of the individuals working with Sanders spoke into his earpiece stating that ‘one of the units’ was ‘in place’ at the one of the businessmenâ€™s personal residence where he lived with his wife and young child.
“Sanders and the others told the attendees that they had until noon on Monday, March 9, 2009, to wire $378,300.16 to a bank account at Patelco Credit Union in the name of the ‘Spirit Foundation,'” the FBI continued. “Sanders threatened the individuals with ‘search and arrest warrants’ if they did not comply with the request.”
Three others later were charged in the alleged extortion scheme: Craig Anderson, 39, of Chicago; Cassandra Moore, 26, of Beverly Hills, Calif.; and Sean Smartt, 41, of Sacramento,Calif.
Read statement by U.S. Attorney Lawrence G. Brown of the Eastern District of California.