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Tag: Anthony Vassallo

  • Judge Calls Ponzi Schemer Who Raised Conspiracy Theory His Attorney Was Working With The Government A Liar, Sentences Him To 16 Years In Federal Prison

    ponziblotterAnthony Vassallo pulled a page from Ponzi schemer Andy Bowdoin’s playbook when he advanced a conspiracy theory that his own defense counsel was working with the government to sell him down the river.

    It didn’t work for Bowdoin, the 78-year old recidivist securities fraudster now serving a 78-month prison term after claiming he’d been “hoodwinked” by his lawyer.

    Now, a similar claim hasn’t worked for Vassallo, 34. He is one of the purveyors of the Equity Investments Management & Trading (EIMT) Ponzi scheme in California, a crime that served up a heaping helping of the bizarre. Three individuals who led an alleged shakedown bid to recover money for investors were charged criminally in 2009, amid allegations they posed as federal agents.

    The Sacramento Bee reported that Vassallo pleaded guilty to wire fraud on Feb. 1. After that, he tried to change his plea, claiming that government prosecutors and agents and a defense attorney “ganged up on him to extract a guilty plea to a crime he didn’t commit.”

    But U.S. District Judge Garland E. Burrell Jr. called Vassallo a “liar” in court on Friday, sentencing him to 16 years in federal prison, prosecutors said.

    “This lengthy sentence is justice served, though it is small comfort to the victims of Vassallo’s crimes, many of whom lost their homes, health, and retirements to this fraud,” said U.S. Attorney Benjamin B. Wagner of the Eastern District of California. “This case was unusual in its scope, but not in the nature of the fraudulent conduct.”

    EIMT gathered more than $80 million before it began to unravel in late 2008, prosecutors said.

    With EIMT foundering, “Vassallo continued to recruit new investments,” prosecutors said. “One investor transferred $250,000 to Vassallo’s account less than two weeks before Vassallo admitted to a group of investors that he had ceased trading and their money had been lost.”

    “This was a classic Ponzi scheme, where you rob Peter to pay Paul,” said José M. Martínez, IRS-Criminal Investigation special agent in charge. “Eventually, you run out of Peters and Pauls.”

  • UPDATE: Ponzi ‘Shakedown’ Suspects Who Impersonated Federal Agents Get 6 Months’ Home Detention And Are Placed On Probation For 2 Years

    Three people charged with conspiring to impersonate federal agents in a bid to rattle the nerves of a Ponzi scheme suspect and recover money have been sentenced to 180 days of home confinement and placed on federal probation for two years.

    A fourth defendant in the shakedown scheme avoided a sentence of home confinement but was placed on federal probation for two years.

    The bizarre shakedown scheme unfolded in March 2009, when Michael David Sanders, 43, of Fair Oaks, Calif.;  Craig Anderson, 41, of Chicago; Sean Smartt, 42, of Sacramento; and Cassandra Moore, 27, of Beverly Hills, Calif.,  entered a California hedge-fund office suite in a bid to recover investor money “lost in a Ponzi scheme carried out by federal defendant Anthony Vassallo,” the FBI said.

    “The defendants entered dressed to give the impression of authority (bullet proof vests, ear pieces, fake credentials, hand cuffs, and badges),” the FBI said.  “Sanders and Anderson announced they were with the FBI and the United States Security and Exchange Commission.

    “In their guilty pleas the defendants admitted to creating an environment that was intimidating and causing the individuals to believe that they were not free to leave,” the FBI continued. “Anderson told the hedge fund operators that they had until noon on Monday, March 9, 2009, to wire $378,300.16 to a Patelco Credit Union bank account in the name of the ‘Spirit Foundation’ and to send an e-mail confirmation to an e-mail address they provided. No money was ever turned over to the defendants.”

    Moore was the only defendant who avoided home detention.

    The shakedown bid was connected to the the alleged Equity Investment Management and Training Inc. (EIMT) Ponzi scheme that gathered more than $40 million.

    It is illegal to impersonate a federal agent. Had the defendants not accepted a plea deal and not qualified for probation, they could have been sentenced to federal prison. Each pleaded guilty and accepted the deal. The IRS assisted in the probe.

  • DEVELOPING STORY: Family Of Alleged Ponzi Schemer In Canada Targeted With Death Threats; Bullets Fired At Home

    Just how far will people go to avoid getting caught or convicted of operating a Ponzi scheme or to reclaim funds lost in a Ponzi scheme — or to send a message that designed to rattle nerves?

    There have been several recent Ponzi or financial-fraud cases with more than just a hint of violent intent.

    Implicated in a massive Ponzi scheme, disbarred Florida attorney surrounded himself with body guards prior to getting charged with racketeering, authorities said. Guns were pulled on multiple occasions, according to media accounts.

    Accused Ponzi schemer Jeffrey Lane Mowen is jailed in Utah amid allegations he sought to hire a fellow inmate to kill four witnesses in the case against him. Meanwhile, the FBI said last year that four individuals staged what effectively was the business equivalent of a coup d’état in California, wielding firearms and posing as federal agents to retrieve money purportedly lost in the alleged Kenneth Kenitzer/Anthony Vassallo Ponzi scheme at Equity Investment Management and Trading Inc.

    Last month, fleeced Texas investor Christine Cayton was arrested in Texas on charges that she brought a gun to the headquarters of Triton Financial LLC — implicated in an investment-fraud scheme by the SEC — and demanded a refund from Triton principal Kurt B. Barton

    Now comes word that bullets were fired in Canada at the home of family members of Tzvi Erez, accused of operating a “printing” Ponzi scheme that gathered $27 million. A school that youngsters in the Erez family attend added security after it received a threatening letter.

    Read the Erez story in the National Post.

  • 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”  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 the 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,  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 businessmen’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.

    Read the SEC complaint against Kenitzer, Vassallo and EIMT.