U.S. Attorney William J. Hochul, Jr. announced that Dwayne Ferguson, 33,
of Buffalo, New York, who was convicted of wire fraud, was sentenced to four
years in prison by Chief U.S. District Judge William M. Skretny. The defendant
was also ordered to pay $630,000 in restitution.
Assistant U.S. Attorney Russell T. Ippolito, Jr., who handled the case,
stated that the defendant is the former owner and operator of Intihar Recovery
of New York, an automobile rental, repossession, storage, and towing services
business. Ferguson fraudulently obtained money from Nissan Motor Acceptance
Corporation, Toyota Financial Services, BMW Financial Services, GMAC Financial
Services, and Ford Motor Credit to finance the purchase of motor vehicles for
his business. The defendant submitted false and misleading documentation to
those lending institutions indicating that his business was credit worthy when,
in fact, the business had very few assets and had significant liabilities. The
total loss to all the victim businesses was $1,110,937.
The sentence imposed by Judge Skretny will be served following the
three-and-a-half- to seven-year New York State sentence Ferguson is currently
serving following his conviction on charges of possession of a forged instrument
and attempted grand larceny.
The sentencing is the result of an investigation by the Buffalo Police
Department, under the direction of Commissioner Daniel Derenda; the New York
State Department of Motor Vehicles, under the direction of Director Owen
McShane; the New York State Department of Taxation and Finance, Criminal
Investigations Division, under the direction of Commissioner Thomas Mattox; the
New York State Department of Financial Services, Criminal Investigations
Division, under the direction of Superintendent Benjamin Lawsky; and the Federal
Bureau of Investigation, under the direction of Special Agent in Charge
Christopher M. Piehota.
Tuesday, August 7, 2012
Saturday, August 4, 2012
Friday, August 3, 2012
House Republicans Vow to Protect our Economy and National Security
Congressman John Boehner (R-West Chester) released the following column discussing House Republicans’ plans to address both the threat to our security posed by the defense sequester, and the threat to our economy posed by the looming tax hike:
“Because of last year’s failure by Washington to sufficiently reduce the deficit, current federal law requires that hundreds of billions of dollars in indiscriminate cuts be made to the national defense budget by January 2, 2013. At that very same time, a small business tax hike is set to hit our nation’s job creators. If Washington does not act, the blow to our national security and economy in January 2013 could be devastating. House Republicans are the only ones in Washington who have offered a plan to address both the threat to our security posed by the defense sequester, and the threat to our economy posed by the coming tax hike on small business owners.
“The branches of our armed services have so far been called upon to accept disproportionally high levels of cuts compared to the rest of the federal government. If the 2013 sequester defense cuts, combined with defense reductions already set to go into place, are allowed to proceed, the consequences could be serious. The president’s own Defense Secretary has warned that the scheduled defense cuts will ‘inflict severe damage to our national defense.’ The enormously critical and challenging missions facing our armed services members across the globe will not diminish on January 1st, but the resources they have to carry them out will.
“House Republicans passed a plan to avert the devastating defense cuts and replace them with common-sense reforms and reductions that go beyond the savings mandated under current law, without compromising our defense capabilities and national security. The Sequester Replacement Reconciliation Act (H.R. 5652), passed by the House on May 10, combines the work of six House committees that produced deficit reduction plans in their respective areas of expertise and produces a savings of $243 billion over ten years.
“Unfortunately, President Obama and Senate Democrats refuse to act. The president has offered no plan of his own to replace the arbitrary cuts with a more responsible approach, and Senate Democrats have made clear that they support allowing the scheduled cuts to take effect, regardless of the consequences. In similar fashion, President Obama and the Democrats who run Washington have been clear that they are not interested in preventing the massive tax increase on small business owners.
“Set to be implemented at the same time as the sequester, President Obama’s massive tax hike will hurt job creation across the country. According to a recent report released by Ernst & Young, the president’s small business tax hike threatens more than 700,000 jobs, and will lead to even less economic growth, less investment, and lower wages for American workers.
“That’s why the House has a plan to stop all of the tax hikes, and to lay the groundwork for a fairer, simpler tax code that closes loopholes, lowers rates for everyone, and helps bring home some of the jobs that have gone overseas. Most Americans understand that if we raise taxes on job creators, we’re going to have fewer jobs. If Democrats want to keep threatening to raise taxes and risk tanking our already-weak economy, the American people will hold them accountable.
“If President Obama and Senate Democrats continue to avoid addressing the threats posed to our country, January 2013 will prove to be devastating for our nation. Instead of working with Congress to address these challenges and help create new jobs, the president is on the campaign trail. The President of the United States is chosen by the people to lead, and now is the time. The president should call on his Democratic allies in the U.S. Senate to join the House and take action to avert the dual threat to our country that is posed by the coming tax hike and defense sequester.”
Boehner represents Ohio’s 8th District, which includes all of Darke, Miami, and Preble counties, most of Butler and Mercer counties, and the northeastern corner of Montgomery County. He was first elected to Congress in 1990.
“Because of last year’s failure by Washington to sufficiently reduce the deficit, current federal law requires that hundreds of billions of dollars in indiscriminate cuts be made to the national defense budget by January 2, 2013. At that very same time, a small business tax hike is set to hit our nation’s job creators. If Washington does not act, the blow to our national security and economy in January 2013 could be devastating. House Republicans are the only ones in Washington who have offered a plan to address both the threat to our security posed by the defense sequester, and the threat to our economy posed by the coming tax hike on small business owners.
“The branches of our armed services have so far been called upon to accept disproportionally high levels of cuts compared to the rest of the federal government. If the 2013 sequester defense cuts, combined with defense reductions already set to go into place, are allowed to proceed, the consequences could be serious. The president’s own Defense Secretary has warned that the scheduled defense cuts will ‘inflict severe damage to our national defense.’ The enormously critical and challenging missions facing our armed services members across the globe will not diminish on January 1st, but the resources they have to carry them out will.
“House Republicans passed a plan to avert the devastating defense cuts and replace them with common-sense reforms and reductions that go beyond the savings mandated under current law, without compromising our defense capabilities and national security. The Sequester Replacement Reconciliation Act (H.R. 5652), passed by the House on May 10, combines the work of six House committees that produced deficit reduction plans in their respective areas of expertise and produces a savings of $243 billion over ten years.
“Unfortunately, President Obama and Senate Democrats refuse to act. The president has offered no plan of his own to replace the arbitrary cuts with a more responsible approach, and Senate Democrats have made clear that they support allowing the scheduled cuts to take effect, regardless of the consequences. In similar fashion, President Obama and the Democrats who run Washington have been clear that they are not interested in preventing the massive tax increase on small business owners.
“Set to be implemented at the same time as the sequester, President Obama’s massive tax hike will hurt job creation across the country. According to a recent report released by Ernst & Young, the president’s small business tax hike threatens more than 700,000 jobs, and will lead to even less economic growth, less investment, and lower wages for American workers.
“That’s why the House has a plan to stop all of the tax hikes, and to lay the groundwork for a fairer, simpler tax code that closes loopholes, lowers rates for everyone, and helps bring home some of the jobs that have gone overseas. Most Americans understand that if we raise taxes on job creators, we’re going to have fewer jobs. If Democrats want to keep threatening to raise taxes and risk tanking our already-weak economy, the American people will hold them accountable.
“If President Obama and Senate Democrats continue to avoid addressing the threats posed to our country, January 2013 will prove to be devastating for our nation. Instead of working with Congress to address these challenges and help create new jobs, the president is on the campaign trail. The President of the United States is chosen by the people to lead, and now is the time. The president should call on his Democratic allies in the U.S. Senate to join the House and take action to avert the dual threat to our country that is posed by the coming tax hike and defense sequester.”
Boehner represents Ohio’s 8th District, which includes all of Darke, Miami, and Preble counties, most of Butler and Mercer counties, and the northeastern corner of Montgomery County. He was first elected to Congress in 1990.
Thursday, August 2, 2012
GOP Leaders: House Will Return in August if Senate Votes to Stop All the Tax Hikes, Stop Defense Cuts
House Republican leaders sent a letter to Senate Majority Leader Harry Reid (D-NV) today urging him to follow the House and bring legislation to a vote stopping all of the coming tax hikes that threaten our economy – including President Obama’s tax hike on small businesses – and replacing the ‘sequester’ defense cuts that threaten our national security.
House Speaker John Boehner (R-OH), Majority Leader Eric Cantor (R-VA), Majority Whip Kevin McCarthy (R-CA), and Republican Conference Chairman Jeb Hensarling (R-TX) pledge that if Senate Democrats take action to address these threats, the House will be called back into session during August for the purpose of sending solutions to the president’s desk.
NOTE: The House passed legislation in May to replace the ‘sequester’ with common-sense spending cuts and reforms, and will vote this week to stop all of the tax hikes which threaten more than 700,00 jobs. You can read the letter from House leaders below or click here for a PDF.
August 1, 2012
The Honorable Harry Reid
Senate Majority Leader
522 Hart Senate Office Bldg
Washington, DC 20510
Dear Senator Reid,
The House passed legislation in May to eliminate the threat to our nation’s security by replacing the defense sequester cuts with common-sense spending cuts and reforms. This week the House will pass legislation to eliminate the threat to our economy posed by the approaching small business tax hike that Ernst & Young estimates will cost our economy more than 700,000 jobs. We write to notify you of our readiness to bring the House back into session in August for the purpose of sending legislation to the president in the event the Senate should follow the House in passing such bills to eliminate these looming threats.
The defense sequester is, as you know, the result of President Obama’s desire to avoid an additional vote on raising the nation’s debt limit before the presidential election. We passed it reluctantly, at your urging, after receiving a commitment that the president and the Democratic leadership in the Senate would work with Republicans to avert the sequester by enacting a deficit reduction package built on pro-growth tax reform and much-needed changes to strengthen and stabilize our entitlement programs.
The president and Senate Democrats failed to make good on this commitment, and it is now essential that the defense sequester be replaced with common-sense spending cuts and reforms. Replacement is necessary to avoid harmful cuts to our military at the beginning of 2013 that President Obama’s own Defense Secretary has warned will be “devastating” to national security. House Republicans remain committed to the full savings required by the Budget Control Act, and we passed a plan to replace the arbitrary cuts to our defenses with responsible spending cuts and reforms. If the Senate passes its own package of alternative cuts and reforms to replace the defense sequester, it is our commitment that the House will reconvene to either consider it or to go to conference to produce a consensus package that can be sent to the president for his signature. However, in order to avert the threat to our nation’s security that is posed by the defense sequester, the Senate must act. A Senate vote to simply postpone the sequester, rather than replace it with common-sense cuts and reforms, is unworkable and unacceptable.
On the tax front, the House this week will act to stop the tax increase on small businesses favored by President Obama and lay the groundwork for fundamental reform of the tax code. It is in the interest of our economy to quickly remove the threat of the entire tax hike. As you are aware, the measure passed by the Senate last week does not stop the small business tax hike. If the Senate follows the House in passing legislation to stop the entire tax hike -- including the small business tax hike -- in a manner that requires House approval before it can be sent to the president, it is our commitment that the House will reconvene immediately to ensure the measure is enacted at the earliest opportunity. But in order to avert the threat to our economy, the Senate must join the House in acting to stop the entire tax increase.
Congress must take action to eliminate both the threat to our economy posed by the looming small business tax hike and the threat to our security posed by the defense sequester. By the end of this week, the Republican-led House will have acted to eliminate both threats. The Democratic-controlled Senate must follow suit. In the event the Senate takes action, we stand ready to bring the House back into session for the purpose of enacting solutions.
Sincerely,
John Boehner
Speaker
Eric Cantor
Majority Leader
Kevin McCarthy
Majority Whip
Jeb Hensarling
Conference Chairman
House Speaker John Boehner (R-OH), Majority Leader Eric Cantor (R-VA), Majority Whip Kevin McCarthy (R-CA), and Republican Conference Chairman Jeb Hensarling (R-TX) pledge that if Senate Democrats take action to address these threats, the House will be called back into session during August for the purpose of sending solutions to the president’s desk.
NOTE: The House passed legislation in May to replace the ‘sequester’ with common-sense spending cuts and reforms, and will vote this week to stop all of the tax hikes which threaten more than 700,00 jobs. You can read the letter from House leaders below or click here for a PDF.
August 1, 2012
The Honorable Harry Reid
Senate Majority Leader
522 Hart Senate Office Bldg
Washington, DC 20510
Dear Senator Reid,
The House passed legislation in May to eliminate the threat to our nation’s security by replacing the defense sequester cuts with common-sense spending cuts and reforms. This week the House will pass legislation to eliminate the threat to our economy posed by the approaching small business tax hike that Ernst & Young estimates will cost our economy more than 700,000 jobs. We write to notify you of our readiness to bring the House back into session in August for the purpose of sending legislation to the president in the event the Senate should follow the House in passing such bills to eliminate these looming threats.
The defense sequester is, as you know, the result of President Obama’s desire to avoid an additional vote on raising the nation’s debt limit before the presidential election. We passed it reluctantly, at your urging, after receiving a commitment that the president and the Democratic leadership in the Senate would work with Republicans to avert the sequester by enacting a deficit reduction package built on pro-growth tax reform and much-needed changes to strengthen and stabilize our entitlement programs.
The president and Senate Democrats failed to make good on this commitment, and it is now essential that the defense sequester be replaced with common-sense spending cuts and reforms. Replacement is necessary to avoid harmful cuts to our military at the beginning of 2013 that President Obama’s own Defense Secretary has warned will be “devastating” to national security. House Republicans remain committed to the full savings required by the Budget Control Act, and we passed a plan to replace the arbitrary cuts to our defenses with responsible spending cuts and reforms. If the Senate passes its own package of alternative cuts and reforms to replace the defense sequester, it is our commitment that the House will reconvene to either consider it or to go to conference to produce a consensus package that can be sent to the president for his signature. However, in order to avert the threat to our nation’s security that is posed by the defense sequester, the Senate must act. A Senate vote to simply postpone the sequester, rather than replace it with common-sense cuts and reforms, is unworkable and unacceptable.
On the tax front, the House this week will act to stop the tax increase on small businesses favored by President Obama and lay the groundwork for fundamental reform of the tax code. It is in the interest of our economy to quickly remove the threat of the entire tax hike. As you are aware, the measure passed by the Senate last week does not stop the small business tax hike. If the Senate follows the House in passing legislation to stop the entire tax hike -- including the small business tax hike -- in a manner that requires House approval before it can be sent to the president, it is our commitment that the House will reconvene immediately to ensure the measure is enacted at the earliest opportunity. But in order to avert the threat to our economy, the Senate must join the House in acting to stop the entire tax increase.
Congress must take action to eliminate both the threat to our economy posed by the looming small business tax hike and the threat to our security posed by the defense sequester. By the end of this week, the Republican-led House will have acted to eliminate both threats. The Democratic-controlled Senate must follow suit. In the event the Senate takes action, we stand ready to bring the House back into session for the purpose of enacting solutions.
Sincerely,
John Boehner
Speaker
Eric Cantor
Majority Leader
Kevin McCarthy
Majority Whip
Jeb Hensarling
Conference Chairman
Manhattan U.S. Attorney Announces Guilty Plea of Student Who Created and Disseminated Counterfeit Coupons on the Internet
Preet Bharara, the United States Attorney for the Southern District of New
York, announced that Lucas Townsend Henderson pled guilty in Manhattan
federal court to wire fraud and trafficking in counterfeit goods, in connection
with his creation, dissemination, and use of counterfeit online coupons for a
variety of products, including household goods and expensive video game systems.
Henderson’s scheme caused retailers and manufacturers to lose approximately
$900,000. He pled guilty before U.S. District Judge John F. Keenan.
According to the complaint and the information filed in Manhattan federal court:
Since July 2010, Henderson created counterfeit coupons designed to look like legitimate ones that are made available to consumers via the website www.SmartSource.com. The counterfeit coupons, which ranged from lower-priced consumer goods like energy drinks, beer, and cigarettes, to more expensive items such as X-Box and PlayStation video game consoles, all made unauthorized use of the “Powered by SmartSource” logo and a distinctive border, both of which are registered trademarks belonging to News America Marketing, a subsidiary of the Manhattan-based News Corporation. Between July 2010 and March 2011, Henderson made a number of the counterfeit coupons available on the Internet by anonymously posting on two message boards devoted to the discussion of online coupons. In addition to creating and disseminating fake coupons himself, Henderson also wrote tutorials and created templates that he posted online and that provided instructions to others for creating counterfeit coupons using their own computers.
Henderson’s actions have resulted in substantial losses to the manufacturers of various affected products and the retailers who sold them. Consumers are also affected by higher prices that manufacturers charge for their goods to compensate for losses due to fraud. For example, in December 2010, $200,000 worth of counterfeit coupons for Tide laundry detergent were redeemed by consumers over a two- to three-week period. Procter & Gamble, which manufactures Tide and is the single largest coupon issuer in the United States, has never issued an online print-at-home coupon. The costs associated with the redemption of those counterfeit coupons were subsequently borne by Procter & Gamble and the various retailers victimized by the fraud.
Henderson, 23, of Lubbock, Texas, faces a maximum sentence of 30 years in prison. He is scheduled to be sentenced by Judge Keenan on November 30, 2012 at 11:30 a.m.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation (FBI).
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Christopher D. Frey is in charge of the prosecution.
According to the complaint and the information filed in Manhattan federal court:
Since July 2010, Henderson created counterfeit coupons designed to look like legitimate ones that are made available to consumers via the website www.SmartSource.com. The counterfeit coupons, which ranged from lower-priced consumer goods like energy drinks, beer, and cigarettes, to more expensive items such as X-Box and PlayStation video game consoles, all made unauthorized use of the “Powered by SmartSource” logo and a distinctive border, both of which are registered trademarks belonging to News America Marketing, a subsidiary of the Manhattan-based News Corporation. Between July 2010 and March 2011, Henderson made a number of the counterfeit coupons available on the Internet by anonymously posting on two message boards devoted to the discussion of online coupons. In addition to creating and disseminating fake coupons himself, Henderson also wrote tutorials and created templates that he posted online and that provided instructions to others for creating counterfeit coupons using their own computers.
Henderson’s actions have resulted in substantial losses to the manufacturers of various affected products and the retailers who sold them. Consumers are also affected by higher prices that manufacturers charge for their goods to compensate for losses due to fraud. For example, in December 2010, $200,000 worth of counterfeit coupons for Tide laundry detergent were redeemed by consumers over a two- to three-week period. Procter & Gamble, which manufactures Tide and is the single largest coupon issuer in the United States, has never issued an online print-at-home coupon. The costs associated with the redemption of those counterfeit coupons were subsequently borne by Procter & Gamble and the various retailers victimized by the fraud.
***
Henderson, 23, of Lubbock, Texas, faces a maximum sentence of 30 years in prison. He is scheduled to be sentenced by Judge Keenan on November 30, 2012 at 11:30 a.m.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation (FBI).
This case is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorney Christopher D. Frey is in charge of the prosecution.
U.S. Prosecutors and Australian Authorities Collaborate to Recover More Than $24 Million from Fraudulent e-Bullion Website
The United States and Australia have secured court orders in asset forfeiture
actions that will lead to millions of dollars being repaid to victims who made
investments or deposits with e-Bullion.com, a website that federal prosecutors
contend operated for years as an illegal money-transmitting business.
e-Bullion was operated by James Fayed, who is currently on California’s death row in relation to a separate investigation that led to him being convicted in state court of contracting with hitmen who murdered his wife.
The domestic litigation in the civil action ended on Monday, July 30, when United States District Judge Philip S. Gutierrez signed a forfeiture judgment awarding to the United States approximately $3.6 million in bank funds and $5.4 million worth of gold, silver, and platinum previously seized by the United States government. The conclusion of the case was prompted by two entities formerly controlled by Fayed—Goldfinger Coin and Bullion (GCB) and Goldfinger Bullion Reserve Corp (GBRC)—withdrawing their claims to the assets.
In the Australian litigation, which was finalized on July 23 by a judge in Perth, GCB, GBRC, James Fayed, and the Estate of the murdered Pamela Fayed agreed to the forfeiture of approximately $13.3 million obtained when precious metals held by Fayed were liquidated. The United States continues to work with Australia to repatriate the funds forfeited in Australia so that the United States can commence efforts to compensate the innocent investors and depositors who put their money into e-Bullion.
e-Bullion purported to provide opportunities to invest in precious metals. Through the website, individuals opened accounts with real money, which they used to purchase virtual “e-currency” purportedly backed by precious metal reserves maintained by Fayed’s companies in the United States and Australia. e-Bullion accountholders could then trade their e-currency with others on the website. While there were no fees associated with establishing or funding an account on the e-Bullion website, there were fees associated with changing e-currency back into real money.
In practice, e-Bullion allowed individuals engaging in fraud to obtain money from victims and move the money around the world while remaining virtually anonymous and avoiding many global banking reporting requirements. An investigation into e-Bullion and GCB by the FBI and IRS-Criminal Investigation revealed that operators of fraudulent “High-Yield Investment Programs” and other illegal investment schemes used e-Bullion to collect millions of dollars of e-currency from victims, much of which was wire transferred by GCB to overseas accounts. The U.S. government’s asset forfeiture case alleged that Fayed and his companies not only allowed these illegal schemes to use e-Bullion to operate—collecting substantial fees when the fraudsters cashed out—but also profited by retaining monies abandoned by fraudsters who believed they were under investigation by law enforcement or were about to be caught.
During the course of the criminal investigation into e-Bullion, Fayed hired hitmen to murder his wife and business partner, Pamela Fayed. James Fayed subsequently was prosecuted by the Los Angeles County District Attorney’s Office and sentenced to death following the separate investigation by local authorities.
During the course of the criminal investigation into e-Bullion and the subsequent asset forfeiture litigation, the United States was able to obtain information from e-Bullion’s and GCB’s encrypted computer servers in California and Switzerland, which the government believes will accurately identify e-Bullion accountholders and the value of their individual accounts. The United States Department of Justice intends to distribute the recovered funds to the innocent accountholders through a process known as “remission,” which allows the government to use forfeited money to compensate domestic and international victims of crime.
This matter was successfully resolved with the substantial assistance provided by Australian authorities including the Australian Federal Police, Attorney General’s Department, and Commonwealth Director of Public Prosecutions. Prosecutors in the United States and Australian authorities worked closely together over the course of the litigation to recover a total of approximately $24 million in assets.
The $24 million figure includes $1.8 million the United States government previously forfeited after tracing the funds to a fraudulent scheme that operated through e-Bullion. The U.S. Department of Justice has already started the remission process related to those forfeited funds (see: http://www.kvremission.com/).
e-Bullion accountholders who wish to be considered for remission may submit claims—which should include copies of supporting account documentation—via e-mail to: usacac.ebullionremission@usdoj.gov. e-Bullion accountholders may also submit claims via mail to:
United States Attorney’s Office
Asset Forfeiture Section
ATTN: e-Bullion Remission
312 North Spring Street,
14th Floor
Los Angeles, CA 90012.
e-Bullion was operated by James Fayed, who is currently on California’s death row in relation to a separate investigation that led to him being convicted in state court of contracting with hitmen who murdered his wife.
The domestic litigation in the civil action ended on Monday, July 30, when United States District Judge Philip S. Gutierrez signed a forfeiture judgment awarding to the United States approximately $3.6 million in bank funds and $5.4 million worth of gold, silver, and platinum previously seized by the United States government. The conclusion of the case was prompted by two entities formerly controlled by Fayed—Goldfinger Coin and Bullion (GCB) and Goldfinger Bullion Reserve Corp (GBRC)—withdrawing their claims to the assets.
In the Australian litigation, which was finalized on July 23 by a judge in Perth, GCB, GBRC, James Fayed, and the Estate of the murdered Pamela Fayed agreed to the forfeiture of approximately $13.3 million obtained when precious metals held by Fayed were liquidated. The United States continues to work with Australia to repatriate the funds forfeited in Australia so that the United States can commence efforts to compensate the innocent investors and depositors who put their money into e-Bullion.
e-Bullion purported to provide opportunities to invest in precious metals. Through the website, individuals opened accounts with real money, which they used to purchase virtual “e-currency” purportedly backed by precious metal reserves maintained by Fayed’s companies in the United States and Australia. e-Bullion accountholders could then trade their e-currency with others on the website. While there were no fees associated with establishing or funding an account on the e-Bullion website, there were fees associated with changing e-currency back into real money.
In practice, e-Bullion allowed individuals engaging in fraud to obtain money from victims and move the money around the world while remaining virtually anonymous and avoiding many global banking reporting requirements. An investigation into e-Bullion and GCB by the FBI and IRS-Criminal Investigation revealed that operators of fraudulent “High-Yield Investment Programs” and other illegal investment schemes used e-Bullion to collect millions of dollars of e-currency from victims, much of which was wire transferred by GCB to overseas accounts. The U.S. government’s asset forfeiture case alleged that Fayed and his companies not only allowed these illegal schemes to use e-Bullion to operate—collecting substantial fees when the fraudsters cashed out—but also profited by retaining monies abandoned by fraudsters who believed they were under investigation by law enforcement or were about to be caught.
During the course of the criminal investigation into e-Bullion, Fayed hired hitmen to murder his wife and business partner, Pamela Fayed. James Fayed subsequently was prosecuted by the Los Angeles County District Attorney’s Office and sentenced to death following the separate investigation by local authorities.
During the course of the criminal investigation into e-Bullion and the subsequent asset forfeiture litigation, the United States was able to obtain information from e-Bullion’s and GCB’s encrypted computer servers in California and Switzerland, which the government believes will accurately identify e-Bullion accountholders and the value of their individual accounts. The United States Department of Justice intends to distribute the recovered funds to the innocent accountholders through a process known as “remission,” which allows the government to use forfeited money to compensate domestic and international victims of crime.
This matter was successfully resolved with the substantial assistance provided by Australian authorities including the Australian Federal Police, Attorney General’s Department, and Commonwealth Director of Public Prosecutions. Prosecutors in the United States and Australian authorities worked closely together over the course of the litigation to recover a total of approximately $24 million in assets.
The $24 million figure includes $1.8 million the United States government previously forfeited after tracing the funds to a fraudulent scheme that operated through e-Bullion. The U.S. Department of Justice has already started the remission process related to those forfeited funds (see: http://www.kvremission.com/).
e-Bullion accountholders who wish to be considered for remission may submit claims—which should include copies of supporting account documentation—via e-mail to: usacac.ebullionremission@usdoj.gov. e-Bullion accountholders may also submit claims via mail to:
United States Attorney’s Office
Asset Forfeiture Section
ATTN: e-Bullion Remission
312 North Spring Street,
14th Floor
Los Angeles, CA 90012.
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