- Be wary of an investment opportunity that offers unusually high yields. UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA. Although prosecutors have said Wannakuwatte lured investors and lenders into giving him around $150 million, Wagner pegged the actual net loss at around $100 million. Fax Line:(916) 554-2900. The victims will never be whole again from the fraud totaling more than $230 million, but rest assured they will have the comfort of knowing Wannakuwatte will be incarcerated for many years to come. (ECF No. The case is tied to his medical-supply business, International Manufacturing Group. He was indicted in March. SACRAMENTO, Calif. Deepal Wannakuwatte, 63, of Sacramento, was charged today in a three-count indictment returned today with bank fraud and making false statements to a financial institution, United States Attorney Benjamin B. Wagner announced. According to authorities, Wannakuwattes companies solicited investors by telling them it had lucrative contracts totaling at least $100 million with the U.S. Department of Veterans Affairs (the USVA). 1B1.13(2) (requiring a defendant to demonstrate that he is "not a danger to the safety of any other person or to the community"); see also 18 U.S.C. With time off for good behavior, he could be out of prison by the time hes 79 or 80, giving him the opportunity to see his grandchildren.. Share sensitive information only on official, secure websites. All rights reserved. But as of the date of this Order, the BOP reports only eight active inmate cases of COVID-19 and 163 recovered inmates at USP Lompoc. WASHINGTONDeepal Wannakuwatte, 63, of Sacramento, California, was sentenced today to 20 years in prison for a long-running fraud scheme, announced United States Attorney Benjamin B. Wagner,. Wannakuwatte subsequently drew down the line of credit, taking approximately $4.3 million from Bridge Bank. . 3582(c)(1)(A) is only available. quotes delayed at least 15 minutes, all others at least 20 minutes. How to Send Money To Deepal Wannakuwatte's Inmate Trust Fund! However, Toronto police alleged that Hibbert did not generate the promised returns, instead using incoming investor funds to make the monthly interest payments. In 2014, the 63-year-old Wannakuwatte was sentenced to 20 years in jail. 135.) Next: $125 Million Latex Glove Ponzi Scheme. Wannakuwatte pleaded guilty unusually early in the process. In order to establish his financial credibility, Wannakuwatte showed investors his personal and corporate tax returns where he actually reported and paid taxes that falsely overstated his annual personal income and the annual gross receipts and sales for IMG. This included schemes from nearly every U.S. state only eight states did not record a hit on our database. Interested congregants were required to invest at least $10,000 with Mr. Hibbert, and at least $8.6 million was raised from approximately 200 parishioners. According to court documents, from 2002 to 2014, Wannakuwatte convinced nearly 200 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Wannakuwattes companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. Recently, Ponzitracker.com compiled an extensive collection of statistics from Ponzi schemes during the six-year period from 2008 to 2013, and the results were staggering. (ECF No. FBI, Penn State offer online death notification training for first responders. This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General, Office of Investigations. For instance: Also interesting: The correlation of Ponzi schemes uncovered to the financial crisis is arguably strong. Lock And he did a have contract with the VA, but it was only for up to $25,000 a year. On Thursday, a federal judge ordered Deepal Wannakuwatte, 64, of Sacramento, to pay $108,199,425 in restitution to victims of his long-running fraud scheme, United States Attorney Benjamin B. Wagner announced today. The dependable returns, as well as the use of advertising featuring popular Indian film stars, caused the scheme to spread like wildfire. Even after the trio accepted guilty pleas from state prosecutors, Steven Palladino recently landed in more trouble when federal prosecutors indicted him on 25 charges of criminal contempt. Wannakuwatte will be sentenced July 24 by U.S. District Judge Troy Nunley. He pleaded guilty to a count of wire fraud in May. In 2013, Wannakuwatte claimed to have more than $125 million in VA contracts alone. Get FBI email alerts Deepal Wannakuwatte, owner of the Las Vegas Neon, was arrested Thursday in Sacramento, Calif., on federal fraud charges. Todays sentencing represents the severity of the fraud committed by Wannakuwatte and those he hurt the most: the victims who fell prey to the massive fraud scheme. The Sentencing Commission's relevant policy statement on compassionate release identifies medical conditions that satisfy the "extraordinary and compelling" requirement. FBI.gov is an official site of the U.S. Department of Justice. But on the heels of a joint investigation with the Internal Revenue Service-Criminal Investigation (IRS-CI) and the Department of Veterans Affairs Office of Inspector General (VA-OIG), Wannakuwattewho pled guilty last yeargot his comeuppance: He was ordered by a federal judge last month to pay millions in restitution to his victims. Toronto police have also been unable to account for several million dollars, which they believe was diverted to an offshore bank account in Panama. The $50 billion in Ponzi schemes uncovered from 2008 to 2013 would rank in the top 75 countries in the world in terms of gross domestic product. Wannakuwatte used the money from investors to cover these losses and pad his own pockets. The agony of his victims, however, continues. Kamir Abou Najm performed research work for the universitys Miller Lab, which studies early signs of autism and ADHD. In early December 2011, Wannakuwatte set up a conference call between himself, an IMG employee, and a Bridge Bank representative. The indictment alleges that between October and December 2011, Wannakuwatte provided Bridge Bank with a number of false documents, including personal and corporate tax returns that overstated his gross income and the gross receipts and sales for IMG, a false corporate financial statement from IMG that was purportedly reviewed by a CPA, and a false accounts receivable ledger detailing more than $25 million in accounts receivable from the VA. Because of the length of the scheme, nearly half of Madoffs investors ended up receiving cumulative interest payments exceeding their total investment. Nunley was unsparing as well, calling Wannakuwatte a liar and adding: Youre an evil person, theres no way you can get around that.. On May 8, 2014, Defendant pleaded guilty to one count of wire fraud in violation of 18 U.S.C. In sum, the Court DENIES Defendant's request for compassionate release because Defendant has not met his burden to show there are extraordinary and compelling reasons for his release. When you realize the case has problems from the defense side, you want to recognize those problems early on, Heller said after the court hearing. He's now serving a 20-year sentence for fraud. The conference call was made to verify the authenticity of the $25 million accounts receivable ledger provided by Wannakuwatte. M.S. Deepal Wannakuwatte, 63, was arrested in February 2014 and indicted on federal fraud charges, including mail fraud and wire fraud, which each carry maximum 20-year prison terms. Guru operated Susi Emu Farms (Susi Farms), which promised potential investors a weekly return of $120 in exchange for a $3,000 investment that supposedly purchased a baby emu. . Defendant also emphasizes he previously tested positive for COVID-19. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt. Wannakuwatte has been in custody since his arrest on February 21, 2014. - Check with a trusted financial adviser, broker, or attorney about any investments you are considering. Based on the false representations, Bridge Bank authorized a line of credit worth $4.5 million. The final chapter in the case came to a close on March 5, 2015, when the judge ordered that Wannakuwatte pay a total of $108,199,452.63 in restitution. He has served approximately 76 months of his 240-month sentence of imprisonment and his projected release date is March 7, 2031. He falsely claimed that these companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. Police see link to similar incidents. 5 Hypergrowth Stocks With 10X Potential in 2023, purchase $200,000 in emergency rations to feed the emus, a $3 million private plane that had been pledged as collateral., beneficiary of an investment by Barbara Corcoran, Penny Stocks How to Profit Without Getting Scammed, When Fraud Bites Business: Lost Fortunes, Reputations and Lives, 3 Big Ways That Medicare Fraudsters Rip You Off, Even if Block Beats on Earnings, Stay Away From SQ Stock, Louis Navellier and the InvestorPlace Research Staff, Rare Stock Indicators Show the Market Is About to Skyrocket, Ideanomics (IDEX) Stock Surges 90% Ahead of Possible Delisting, MULN Stock Alert: UNC Charlotte Orders Mullen Vans. Wannakuwatte, dressed in his orange Sacramento County jailhouse uniform, sat at the defense table and stared at the floor as Ashley berated him. BOP records do, however, confirm Defendant has been diagnosed with essential (primary) hypertension. Donnie Wahlberg Pokes Fun At Brother In Wahlburgers Ads, 2012-2023, 2paragraphs Productions, LLC. In total, Sundown raised more than $7 million from over 150 investors. According to the Bee, Wannakuwatte, 63, had been under investigation by several federal agencies, including Veterans Affairs, the FBI, the Internal Revenue Service and the Federal Deposit. A thief, a serial thief.. And while Wanakuwatte made payments to some of the earlier investors as a way of pacifying them, eventually the scam began to implode as more investors and lenders wanted what was owed them and Wanakuwatte couldnt make the payments. During that time frame, he fraudulently obtained in excess of $230 million from more than 150 victims, including individuals, businesses, government agencies, and financial institutions. SACRAMENTO, CAOn Thursday, a federal judge ordered Deepal Wannakuwatte, 64, of Sacramento, to pay $108,199,425 in restitution to victims of his long-running fraud scheme, United States Attorney Benjamin B. Wagner announced today. Theres no way I can make the victims whole, Nunley said. In addition, Persaud also operated the White Elephant Trading Company LLC (White Elephant), which he registered with the state of Florida under the name of his family members to avoid scrutiny from his employer. It is also encouraging that Defendant recovered without any documented complications. Compare with Westlaw Troy L. Nunley United States District Judge ORDER This matter is before the Court on Defendant Deepal Wannakuwatte's ("Defendant") Motion for Compassionate Release Pursuant to 18 U.S.C. emailStay Connected The reason for the lower figure was that some investors got their money back. c. Petitioners Maneggie and Henley-Curtis are informed and believe and based thereon allege that on or about July 29, 2011, acting on behalf of the partnership and in furtherance of their duties and responsibilities under the MOU, defendant Deepal . In total, nearly 5,000 investors invested in Madoffs scheme. An investigation began after a tip from an investor in 2013 and involved a joint investigation by the Federal Bureau of Investigation, the Internal Revenue Service, and the Federal Deposit Insurance Corporation, Office of the Inspector General. Barely three months ago, Deepal Wannakuwatte was the picture of success: owner of a medical-supply company and of the Sacramento Capitals professional tennis team. U.S. Attorney's Office, Eastern District of California, Domestic Violence, Child Exploitation, and Human Trafficking Prevention, Sacramento Businessman Indicted For Bank Fraud, Mexican National Residing in Bakersfield Sentenced to 18 Months in Prison for Illegal Cockfighting in Violation of the Animal Welfare Act, Laser Strikes on Kern County Sheriff Helicopter Lead to Prison Sentence, Federal Agent Pleads Guilty to Making False Statements in Connection with a Sexual Relationship with a Victim Witness. He said Wannakuwatte spent the money on personal and business expenses. Wannakuwatte took over the Capitals in 2012 after previous owner Bob Cook filed for bankruptcy protection. Ironically, Steven Palladino was also accused of using investor funds to make court-ordered payments stemming from a previous conviction for defrauding an elderly relative. Then last week he turned the. The tax refunds and other assets will be eventually distributed among his victims, but its all but certain they wont get full recovery. Instead, Rocco was accused of operating a Ponzi scheme that used investor funds to pay returns. Official websites use .gov Share on Twitter Twitter Take the time to do your own research on the investments potentialand on the person making the offer. Deepal Wannakuwatte, the former owner of the now-defunct Sacramento Capitals professional tennis team, was sentenced to 20 years in prison Thursday for perpetrating one of the costliest Ponzi. The purpose of these calls was to convince investors that he really did have a significant business relationship with the VA and that their money would be safe with him. 24, 2020). Official websites use .gov - Request written financial informationsuch as a prospectus, annual reports, or financial statementsthen compare the written information to what you were told. 3582 (C) (1) (A) (i). A .gov website belongs to an official government organization in the United States. We are committed to aggressively pursue those who attempt to circumvent the law for personal gain., This case shows that the appearance of success can mask a tangled financial web of lies, said Acting Special Agent in Charge Thomas McMahon, IRS-Criminal Investigation. Since 2008, at least 500 Ponzi schemes were uncovered worldwide, including Bernard Bernie Madoffs legendary $17 billion scheme. (Id.) American Greed airs Thursdays at 10pm on CNBC. However, there were very few legitimate loans, and the Palladinos paid the advertised interest by simply using funds from new investors. Gurudeo Buddy Persaud, 47, was arrested and charged with operating a Ponzi scheme that promised risk-free returns derived from investing in the futures markets and other markets. Later, Wannakuwatte stood silently as defense attorney Philip Cozens read a letter from his client in which Wannakuwatte apologized to his victims and said he had shamed his family and his Sri Lankan roots. However, the reality was that Persaud did not invest in futures markets; instead, his trading strategies were based on lunar cycles and the gravitational pull between Earth and the moon. For example, one two-month period resulted in $8,000 in legitimate revenue and $1.7 million in new investments. The total value of the properties, vehicles, business interests, and bank accounts is estimated to be at least $3.5 million. Defendant is 69 years old and claims he is particularly vulnerable to COVID-19 because he suffers from multiple medical conditions, including serious lung disorders, a severely compromised immune system, hypertension, and gastrointestinal bleeding. The functioning of a Ponzi scheme is inherently simple. In fact, while he did have a contract with the VA, it was only worth up to $25,000 a year. The scheme, which spanned decades, ultimately caused at least $17 billion in losses to thousands of investors. While Sundown did actually engage in comic book production, the resulting revenues were not nearly enough to make the promised returns to investors. Sacramento, CA. . The video promised that the VCMs would generate income for years, and promised that a $3,500 investment could produce huge returns. The alleged mastermind, Joseph Signore, is also accused of soliciting investors via emails that included a Bible passage intended to create a false sense of security and appeal to the religious beliefs of investors. watch now. Real-time updates and all local stories you want right in the palm of your hand. emailStay Connected Betsy Wannakuwatte, the wife of Deepal Wannakuwatte, was served by personal service on the same date. The companies came under suspicion after a creditor filed a lawsuit alleging nonpayment of a loan. In total, authorities estimated that Susi Farms took in more than $100 million from at least 8,000 investors. For the foregoing reasons, the Court hereby DENIES Defendant's Motion for Compassionate Release Pursuant to 18 U.S.C. Contrary to his representations, Wannakuwatte used much of the money he obtained to pay himself and his family, make lulling payments to participants in his fraudulent investment schemes, and pay outstanding debts unrelated to his false representations. He further avowed that these companies had annual revenues in the tens of millions of dollars. Fax Line:(916) 554-2900. Show Crime Records Powered by. Wannakuwatte told his victims that his Sacramento-based companiesInternational Manufacturing Group (IMG) and Relyaid Global Health Carewere involved in the international manufacture and sale of latex gloves. Five of these schemes have raised at least $1 billion from investors, and Bernie Madoffs scheme is recognized as the worst Ponzi scheme in history. Indeed, while Madoff involved several thousand investors, the court-appointed receiver in ZeekRewards announced that he had received proof of claim forms from over 174,000 victims. In return, those affiliates were handsomely rewarded with daily returns of 1.5%. One spoke about having to delay retirement and sell his house to make ends meet. Robert Rocco, 48, was indicted in 2013 on multiple federal fraud charges that could land him behind bars for decades. The Court acknowledges USP Lompoc has had one of the worst COVID-19 outbreaks of any federal prison. As an aside, IMG actually had been in business for more than 25 years and actually did sell gloves and other supplies to businesses, including medical providers. Over twelve years (2002 to 2014), Wannakuwatte convinced several investors that their money was financing RelyAid Global Healthcare, a manufacturer of latex medical gloves which Wannakuwatte claimed had $125 million worth of contracts with the U.S. Department of Veterans Affairs. Jul. The team was renamed the Las Vegas Neon. In that position, Rocco solicited club members to invest in his company, Limestone Capital Services, which they were told provided wholesale financing of cigarette purchases for a tobacco shop located on the Shinnecock Native American Reservation. In a Ponzi scheme, early investors often get repaid with dollars pumped in by newcomers. Deepal Wannakuwatte, 63, was arrested in February 2014 and indicted on federal fraud charges, including mail fraud and wire fraud, which each carry maximum 20-year prison terms. The sentence imposed today is tantamount to a life sentence, although no amount of prison time will undo the harm he caused to so many victims. If convicted, Wannakuwatte faces a maximum sentence of 30 years in prison and a $1million fine for each count. (ECF No. Prosecutors have said the net loss to investors came to $109 million. 2:14-cr-00067-TLN (E.D. While Madoff initially maintained that he acted alone, it became apparent that the sheer size of his scheme meant he alone could not have kept the scheme going for so long. From 2002 until his arrest in February 2014, Wannakuwatte defrauded between 150 and 200 individuals, companies, and government entities out of $230,000,000 through a classic Ponzi scheme. And after several months of reviewing more than 10 years worth of business records, analyzing tax and other financial documents, conducting interviews of employees and victims, serving search warrants, etc., law enforcement was able to piece together how the scam worked. Wannakuwatte told his victims he had $100 million worth of contracts to supply latex gloves to veterans hospitals, when in fact the contracts totaled just $25,000 a year. (Id. The defendant offered up an apology, read aloud by his lawyer, and accepted his prison sentence in silence. The cities are Baton Rouge LA, Carson City NV, Chicago IL, El Dorado Hills CA, Phoenix AZ, Sacramento CA, Seattle WA, Sequim WA, W Sacramento CA, and West Sacramento CA. ), No. Michael Hooper, a Carmichael man who lost more than $200,000, recalled how Wannakuwatte ingratiated himself with his victims. Jordan Maglich is a securities attorney with Wiand Guerra King P.L. (ECF No. 3582(c)(1)(A) and U.S.S.G. The FBI joined forces with IRS and VA investigators and began looking at Wannakuwatte, his businesses, and his financials. ) or https:// means youve safely connected to the .gov website. He falsely claimed that his companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. Daniel Parrili, John Lauer, and Christopher Anderson met in a Wisconsin prison where, unsurprisingly, they were currently serving time for fraud-related charges.

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