Based on the false representations, Bridge Bank authorized a line of credit worth $4.5 million. The Court acknowledges USP Lompoc has had one of the worst COVID-19 outbreaks of any federal prison. Lock SACRAMENTO, Calif. Deepal Wannakuwatte, 63, of Sacramento, was sentenced today to 20 years in prison for a long-running fraud scheme, announced United States Attorney Benjamin B. Wagner, Special Agent in Charge Monica M. Miller of the FBI's Sacramento Field Office, Acting Special Agent in Charge Thomas McMahon for the IRS-Criminal 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. One spoke about having to delay retirement and sell his house to make ends meet. When Hoopers mother died four years ago, Wannakuwatte attended the funeral. 95814, Telephone:(916) 554-2700 You are a liar, a serial liar. And hell be doing that from his jail cell, where hell be serving out his 20-year sentence. In total, nearly 5,000 investors invested in Madoffs scheme. But he walked into court that day and announced that hed fired his original lawyer, Donald Heller, claiming that Heller had coerced him into pleading guilty. Wannakuwatte was sentenced to 20 years in prison after an emotional sentencing hearing on November 13, 2014. This sentence brings to an end to one of the longest running, most extensive, and most damaging fraud schemes our region has ever seen, said U.S. Attorney Wagner. 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. 3582(c); see Dillon v. United States, 560 U.S. 817, 824-25 (2010). Get FBI email alerts There, the judge said, Deepal, you are a sociopath. Wannakuwatte claimed that his companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves and did more than $100 million of business with the Department of Veterans Affairs every year. Prosecutors say Wannakuwatte conned his victims into investing in a West Sacramento medical supply company whose revenue was just a fraction of what he claimed. After the previous owner of the Capitals went bankrupt in 2011 and the team was in jeopardy, Wannakuwatte stepped in and kept the team alive. 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). A thief, a serial thief. In February 2015, he was ordered to forfeit more than $3 million worth of real estate, vehicles, interests in financial accounts, cash, and business interests. Assistant United States Attorneys Michael M. Beckwith and Kevin C. Khasigian prosecuted the case. The lesson learned from a case like this? For the reasons set forth below, the Court DENIES Defendant's motion. What Is the Kenvue IPO Price Range? Defendant made a request to the warden on April 23, 2020. Perhaps fittingly, Madoffs 150-year sentence ranks as the longest Ponzi prison sentence. A .gov website belongs to an official government organization in the United States. Ponzi schemes have seemingly endless variations, which has led to this list of newsworthy Ponzi schemes, ranging from a emu-raising Ponzi scheme to astrology to latex gloves. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. For example, a $257 invoice was modified to create a $12 million invoice. Additionally, investor funds were used to support the lavish lifestyle of Persaud and his family members. The dependable returns, as well as the use of advertising featuring popular Indian film stars, caused the scheme to spread like wildfire. However, relief under 18 U.S.C. However, there were very few legitimate loans, and the Palladinos paid the advertised interest by simply using funds from new investors. Experts said it would have been difficult for Wannakuwatte to withdraw his guilty plea, and his new lawyer, Cozens, announced to the court in September that his client was ready to be sentenced. As to his conditions of confinement, Defendant has not shown he is unable to manage his health conditions and minimize his risks through self-care. Deepal Wannakuwatte, the former professional tennis team owner who ran one of the biggest Ponzi schemes in Sacramento history, has been ordered to repay his victims $108.2 million. 25, 2020) ("General concerns about possible exposure to COVID-19 do not meet the criteria for extraordinary and compelling reasons for a reduction in sentence set forth in the Sentencing Commission's policy statement."). 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. Copyright Share on Facebook Facebook (ECF No. Toronto police have also been unable to account for several million dollars, which they believe was diverted to an offshore bank account in Panama. Wannakuwatte has been in custody since his arrest on February 21, 2014. (ECF No. According to the Commission, Zeek Rewards current cash holdings of $225 million were at risk of rapid depletion had investors elected to receive cash distributions rather than accumulate profit points. A receiver was appointed by a North Carolina federal court to preserve and recover assets for the benefit of investors, and has recently sought to recover winnings from net winners that were fortunate enough to profit off their investment with Zeek Rewards. Next: A Virtual Concierge Ponzi Scheme With A Shark Tank Link. Although Defendant claims to suffer from multiple, serious medical conditions, he fails to submit any medical documentation to confirm that he actually suffers from those conditions. In truth, the government contracts were worth only $25,000. And while his victims suffered, Wannakuwatte purchased luxury homes, vehicles, airplanes, and even a professional tennis team. This case is the product of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Lock 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. This case should serve as a warning to those thinking of committing fraud., FDIC OIG Special Agent in Charge Wade V. Walters stated, The sentencing of Mr. Wannakuwatte today reflects fitting punishment for a fraud scheme that victimized so many trusting individuals, businesses, government agencies, financial institutions, and others. 20.) Wannakuwattes companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. On November 13, 2014, this Court sentenced Defendant to a 240-month term of imprisonment followed by a 36-month term of supervised release. An official website of the United States government. watch now. In fact, while he did have a contract with the VA, it was only worth up to $25,000 a year. 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. All rights reserved. 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. Id. On June 18, 2020, Defendant filed the instant pro se motion for release pursuant to 18 U.S.C. For individual investors, Wanakuwatte had encouraged them to obtain their investment money from the equity in their homes or from their retirement accountsas a result, many lost everything. No Thanks Investor funds were diverted for a variety of unauthorized purposes, including trips to the Bahamas, hundreds of thousands of dollars in gambling losses, and even the payment of rent for Steven Palladinos mistress. Deepal, you are a sociopath, he said. Although the government has initiated proceedings to seize his home in South Land Park, vacation properties in Hawaii and on the Oregon coast, and other assets, its considered unlikely that victims will receive more than pennies on the dollar. The fraud has aged him and I pray daily he will survive.. 3582(c)(1)(A). Persaud solicited investors by promising risk-free annual returns ranging from 6% to 18%, telling them he was able to generate such gains through trading in futures and other markets. If convicted, Wannakuwatte faces a maximum sentence of 30 years in prison and a $1million fine for each count. 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. American Greed airs Thursdays at 10pm on CNBC. Troy L. Nunley United States District Judge, This matter is before the Court on Defendant Deepal Wannakuwatte's ("Defendant") Motion for Compassionate Release Pursuant to 18 U.S.C. A former owner of the Sacramento Capitals professional tennis team, Wannakuwatte purchased properties in Hawaii, Oregon and California. Using a series of talking points provided by Wannakuwatte, the IMG employee told the Bridge Bank representative that there were more than 60 invoices showing a total of more than $25.8 million in payments owed by the VA to IMG. Deepal took full advantage of him in any way he could, she wrote. 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. This ruling concludes the federal criminal prosecution; civil proceedings in the United States Bankruptcy Court are ongoing. Additionally, Hibbert and his wife diverted investor funds for their own personal use, including the purchase of luxury automobiles and real estate. However, Persauds trading strategy of relying on lunar cycles to make trades was not only undisclosed to investors, but also generated more than $400,000 in losses. In 2013, Wannakuwatte claimed to have more than $125 million in VA contracts alone. 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. Viking Financial Group (Viking) was owned and operated by Steven Palladino, his wife Lori Palladino, and his son, Greg Palladino. Cal. Wannakuwatte filed court papers this week saying the loss was really somewhere between $50 million and $80 million. For more than decade, up until February 2014, Sacramento businessman (and Ponzi scammer extraordinaire) Deepal Wannakuwatte fooled his investors and his lenders into believing that he and his. Federal prosecutors said that, from 2002 to 2014, Wannakuwatte fraudulently raised $230 million from nearly 200 investors for his companies International Manufacturing Group and RelyAid Global. Red flags, copy-with-cite, case summaries, annotated statutes and more. . On November 13, 2014, United States District Judge Troy L. Nunley sentenced Wannakuwatte to 20 years in prison and ordered him to forfeit multiple properties, vehicles, business interests, and bank accounts totaling at least $3.5 million to be used to provide restitution to victims. 3582(c)(1)(A) is only available. Stock Market Crash Alert: Mark Your Calendars for May 3. Real-time updates and all local stories you want right in the palm of your hand. Daniel Parrili, John Lauer, and Christopher Anderson met in a Wisconsin prison where, unsurprisingly, they were currently serving time for fraud-related charges. He essentially overpaid, using the victims money, said U.S. Attorney Benjamin Wagner at a news conference following Wannakuwattes court appearance. He used investors money to pay the overstated tax returns. While Sundown did actually engage in comic book production, the resulting revenues were not nearly enough to make the promised returns to investors. U.S. Attorney's Office, Eastern District of California, Domestic Violence, Child Exploitation, and Human Trafficking Prevention, Former Owner Of Sacramento Capitals Tennis Team Sentenced To 20 Years In Prison For Fraud Scheme Exceeding $100Million In Losses, 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. This ruling concludes the federal criminal prosecution; civil proceedings in the United States Bankruptcy Court are ongoing. 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. The Sentencing Commission's relevant policy statement on compassionate release identifies medical conditions that satisfy the "extraordinary and compelling" requirement. He purchased the Capitols with his ill-gotten gains and moved them to Las Vegas in February 2014. emailStay Connected As the economy deteriorated, efforts by investors to withdraw money from their once-trusted financial advisers combined with the decrease in new investors collapsed many of the schemes. In total, the venture raised over $10 million from at least 40 investors. See, e.g., United States v. Eberhart, No. The warden denied Defendant's request on May 13, 2020. But the hourlong hearing in U.S. District Court didnt lack for drama. 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. The Sacramento, California businessman operated a $230 million medical glove Ponzi scheme. UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA. You are a liar, a serial liar. FBI.gov is an official site of the U.S. Department of Justice. 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. watch now. And he did a have contract with the VA, but it was only for up to $25,000 a year. [1] [2] The new Las Vegas team was shut down a few weeks later, before it even started after owner Deepal Wannakuwatte was arrested for running a Ponzi scheme. He is scheduled to be arraigned on March 21, 2014. VIDEO 04:01. The total value of the properties, vehicles, business interests, and bank accounts is estimated to be at least $3.5 million. Copyright 2015, American Bar Association. Wannakuwattes companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. In fact, there were no such invoices, and no such debt was owed by the VA to IMG. 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. Deepal Wannakuwatte and Betsy are not now, and never have been, members or owners of Sunfire. 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, Special Agent in Charge Monica M. Miller of the FBIs Sacramento Field Office, Acting Special Agent in Charge Thomas McMahon for the IRS-Criminal Investigation, and Special Agent in Charge Wade V. Walters of the Federal Deposit Insurance Corporation Office of Inspector General. 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. Robert Rocco, 48, was indicted in 2013 on multiple federal fraud charges that could land him behind bars for decades. Deepal Wannakuwatte, former owner of the Sacramento Capitols professional tennis team, has been ordered to pay more than $100 million in restitution to victims of a decade-long Ponzi scheme he perpetrated. In his highprofile pursuit for prestige and financial gain, Wannakuwatte had no regard for public trust and the financial stability of his victims, said Special Agent in Charge Monica M. Miller of the Sacramento Division of the Federal Bureau of Investigation. Neither agreed to talk to The Bee afterward. The. For the foregoing reasons, the Court concludes Defendant is neither terminally ill nor subject to a serious or unrecoverable condition that substantially diminishes his ability to provide self-care within a BOP facility. Investors are promised above-average returns that generally carry little risk. 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. In addition to the prison term, United States District Judge Troy L. Nunley ordered Wannakuwatte to forfeit multiple properties, vehicles, business interests, and bank accounts to be used to provide restitution to victims. 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. While Mr. Wannakuwatte contemplates his situation from behind prison walls in the coming years, my office will continue to try to identify and liquidate ill-gotten gains that rightfully belong to his victims.. Police see link to similar incidents. The Government also submits Defendant's BOP medical records filed under seal which do not include any information about Defendant's claimed serious lung disorders, severely compromised immune system, or gastrointestinal bleeding. The case is tied to his medical-supply business, International Manufacturing Group. (ECF No. Fri, Aug 12 2016 4:30 PM EDT. Assistant United States Attorney Michael M. Beckwith is prosecuting the case. 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. No Thanks The total value of the properties, vehicles, business interests, and bank accounts is estimated to be at least $3.5 million. Nunley was unsparing as well, calling Wannakuwatte a liar and adding: Youre an evil person, theres no way you can get around that.. Hes owed the refunds, ironically, because he deliberately overpaid his taxes in order to lull his victims into complacency by showing them IRS returns with vastly inflated incomes. He's now serving a 20-year sentence for fraud. 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. The letter was read aloud by Assistant U.S. Attorney Kevin Khasigian. Heller denied that. And in 2012, Bank of Internet issued a $1.26 million mortgage to Deepal Wannakuwatte, a Sacramento businessman who received a 20-year prison sentence last year for operating, for more than 10 . Unfortunately, the victims will likely remain short-changed. 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. However, while IMG and RelyAid did have a business relationship with the USVA, authorities alleged that this relationship was grossly overstated. In a Ponzi scheme, early investors often get repaid with dollars pumped in by newcomers. Then last week he turned the. In addition to the prison term, United States District Judge Troy L. Nunley ordered Wannakuwatte to forfeit multiple properties, vehicles, business interests, and bank accounts to be used to provide restitution to victims. Indeed, authorities alleged that Rocco even used his position as club president to withdraw nearly $67,000 from the clubs bank accounts a move that nearly depleted club coffers if not for the generosity of club benefactors to cover the shortfalls. 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. Invest Your Money Wisely: Tips for Consumers. An official website of the United States government. Wannakuwatte was supposed to be sentenced Aug. 7. He further avowed that these companies had annual revenues in the tens of millions of dollars. In 2013, Wannakuwatte claimed to have more than $125 million in VA contracts alone. In total, authorities estimated that Susi Farms took in more than $100 million from at least 8,000 investors. 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.. Bernie Madoffs scam was merely one of more than 500 Ponzi schemes of $1 million or more that collectively involved over $50. Kamir Abou Najm performed research work for the universitys Miller Lab, which studies early signs of autism and ADHD. A lock ( 3582(c)(1)(A) (requiring a consideration of the 3553(a) factors before granting compassionate release). This equates to roughly $6.3 billion per year of investor wealth lost to Ponzi schemes or nearly the annual GDP of Africas Republic of Niger. 1B1.13. . Susi Emu Farms took on the obligation of raising the emu, and investors were told that the returns were possible because of the alleged value in emu meat and oil. 135.) DEEPAL WANNAKUWATTE, Defendant. Among his victims were banks, an Indian tribe in Washington state, as well as roughly 150 individuals. Investors were told that an investment in JCS Enterprises involved the purchase of a virtual concierge machine (VCM) that resembled an automatic teller machine and allowed users to view advertisements for products or services. Defendant has not met his burden. Wagner said losses to investors totaled around $100 million. Defendant also emphasizes he previously tested positive for COVID-19. He shows up at a funeral populated by people he was stealing from, Hooper said. Prosecutors said he persuaded his victims to invest in his West Sacramento medical supply company, International Manufacturing Group, by telling them he had contracts worth $100 million to sell latex gloves to veterans hospitals. 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. The case against Deepal Wannakuwatte was already one for the books: a successful immigrant businessman, owner of a professional tennis team, admitting he had perpetrated one of the largest Ponzi. 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. 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 the instant case, it is undisputed that Defendant has met the threshold exhaustion requirement. 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. Nine of his victims made statements to the court, either in person or by letters read out loud by the prosecutor. Prosecutors have said the net loss to investors came to $109 million. Assistant United States Attorneys Michael Beckwith and Kevin Khasigian are prosecuting the case. 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. UNITED STATES OF AMERICA, Plaintiff, v. DEEPAL WANNAKUWATTE, Defendant. His partner in the Capitals, a Fair Oaks man named Ramey Osborne, wound up loaning Wannakuwatte about $456,000, according to bankruptcy court records. KVUE Stock IPO: When Does Kenvue Go Public? 3582(c)(1)(A) sets forth a rare exception to the general rule. From behind cars, Deepal Wannakuwatte tries to convince his own mother his sentencing isn't nearly as bad as it sounds. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s). 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. n. 1(A). 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. This story was originally published November 13, 2014, 3:50 PM. 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. Since 2008, at least 500 Ponzi schemes were uncovered worldwide, including Bernard Bernie Madoffs legendary $17 billion scheme. 501 I Street, Suite 10-100 Mar. Defendant is currently serving his sentence at USP Lompoc. Ultimately, Wannakuwatte obtained well over $230 million from his victims. (ECF No. The rebranded Las Vegas Neon went defunct almost immediately after his arrest. In India, thousands of citizens were duped out of an estimated $50 million after authorities uncovered a massive Ponzi scheme that promised steady returns supposedly generated not from stocks, not from options but from raising emus. From Bernie Madoff to bogus emu investments, these 10 Ponzi schemes turned heads with their big sums and odd natures. Little if any legitimate investing actually takes place, and the Ponzi scheme depends on the continuous flow of funds from new investors to meet obligations to existing investors.
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