Now, A ‘Turkish Bonds’ Ponzi Scheme Aimed At Retirees, Feds Say; 2 Men Charged In Illinois — And 1 Man Is ‘Fugitive’
EDITOR’S NOTE: This may be one for your “Bubba Blue” notebook on how to have your Ponzi scheme.
A principal of USA Retirement Management Services and a pitchman have been charged in an alleged $28 million fraud scheme involving nonexistent “Turkish bonds” and targeted at senior citizens and “individuals with substantial savings,” federal prosecutors in the Northern District of Illinois said.
Facing arraignment in Chicago today are Robert C. Pribilski, 54, of Lisle, and John T. Burns III, 53, of Naperville.
Pribilski, a USA Retirement principal, was charged with five counts of wire fraud and four counts of mail fraud. Seminar pitchman Burns, meanwhile, was charged with three counts of wire fraud and three counts of mail fraud, prosecutors said.
Mahmut Erhan Durmaz, 42, also was charged with five counts of wire fraud and four counts of mail fraud, but is a “fugitive believed to be residing in Turkey,” prosecutors said.
While in the United States, Durmaz resided in the Chicago suburb of Streamwood. He also lived in Los Angeles and has used the name Francois E. Durmaz, prosecutors said.
Durmaz fled the United States on “the same day that a judge froze” his personal and business assets after an SEC civil action against Durmazin and against Pribilski in 2010, prosecutors said.
The scheme operated between 2005 and 2010 and featured the sale of promissory notes “that falsely represented USA Retirement ‘absolutely and unconditionally’ promised to pay investors between 4.75 and 11 percent annually, prosecutors said.
From a statement by the office of Acting U.S. Attorney Gary S. Shapiro:
Pribilski and Durmaz falsely claimed that the interest would be generated from investments in Turkish bonds. Instead, Pribilski and Durmaz operated a Ponzi-type scheme, using funds from the sale of promissory notes to make payments to other investors without disclosing that there were no Turkish bond investments. In offering and selling USA Retirement promissory notes, all three defendants falsely told investors that they had many years of investment banking experience in the purchase and sale of Turkish bonds, and that they had personally profited from such investments through USA Retirement. In fact, the defendants had no such banking experience and did not make any investments in Turkish bonds.
