Earlier today, a 21-count superseding indictment was unsealed charging Bryan Arias, Anthony Ciccone, Diane Kaylor, Jason Keryc, and Shamika Luciano, former employees of Hauppauge-based Agape World Inc. (Agape) and Agape Merchant Advance (AMA), for their participation in a large-scale Ponzi scheme. The superseding indictment adds two new defendants, Arias and Luciano; a securities fraud charge; a mail fraud count; and two additional wire fraud counts. The defendants are scheduled to be arraigned on the superseding indictment this afternoon before United States Magistrate Judge A. Kathleen Tomlinson at the United States Courthouse in Central Islip, New York.
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Philip R. Bartlett, Inspector in Charge, United States Postal Inspection Service, New York (USPIS).
“Today’s superseding indictment is but the latest step in this office’s dismantling of the fraudulent business empire of Nicholas Cosmo,” stated United States Attorney Lynch. “The defendants charged were an integral part of Cosmo’s Ponzi scheme that defrauded thousands of people of hundreds of millions of dollars. The defendants actively promoted the Ponzi scheme, promising safe investments in low risk business ventures. Even when the business ventures began to fail, the defendants continued to peddle lies and deceit to the investors in order to keep money flowing into the scheme.” Ms. Lynch added that the government’s investigation is continuing.
“As alleged in the indictment, the defendants’ foundation for success was built on deception and sham investments using the victims’ money. Over time, as with all Ponzi schemes, the defendants’ lies began to unravel, leaving the collective investors millions of dollars out of pocket. Unfortunately, the public should be reminded that sometimes investment opportunities that are too good to be true are merely schemes designed to steal your money. The FBI, along with our law enforcement partners, will continue to aggressively investigate those who prey upon the public with illegal get-rich-quick plans,” stated FBI Assistant Director in Charge Venizelos.
“Today’s arrests should serve notice to criminals that postal inspectors will leave no stone unturned to bring to justice all parties involved in any crime that utilizes the U.S. mail to steal the hard earned money of consumers,” said Inspector in Charge Bartlett.
Nicholas Cosmo founded Agape and AMA in August 2000. According to the superseding indictment and court filings, between October 2003 and January 2009, Arias, Ciccone, Kaylor, Keryc, and Luciano, who worked as account representatives or brokers for Cosmo, played critical roles in the operation of a Ponzi scheme by soliciting and obtaining hundreds of millions of dollars from investors. To induce investments and discourage withdrawals, the defendants misled the investors by, among other things, (1) assuring investors that their investments would only be used to fund specific, short-term secured bridge loans to commercial borrowers or to make short-term loans to small businesses, (2) promising to pay investors unusually high rates of returns, and (3) representing that investing in Agape and AMA carried little or no risk of loss. The defendants allegedly raised significantly more money than was needed for the loans and lied to the investors when they assured them that their money would specifically be used to fund only a particular loan. For their efforts, Arias, Ciccone, Kaylor, Keryc, and Luciano received approximately $1.7 million, $10.7 million, $4.75 million, $16 million, and $275,000, respectively.
As alleged in the superseding indictment, Cosmo and the defendants actually ran a Ponzi scheme, paying returns to Agape and AMA investors not from any profits earned on investments but rather from existing investors’ deposits or money paid by new investors. In addition, unbeknownst to the investors, approximately $100 million of their money was used to trade high risk futures and commodities. Despite the fact that the defendants knew that Agape and AMA did not produce or earn rates of return that could support the exorbitant returns promised to investors, they allegedly continued to solicit money from investors.
As the fraudulent scheme began to unravel, the defendants allegedly lied to investors about the status of various Agape bridge loans. For example, on November 3, 2008, the defendants learned that all Agape’s 2007 bridge loans were in default or on extension but allegedly failed to disclose that information to existing or new investors. Instead, the defendants actively continued to solicit money from investors, obtaining an additional $25.6 million.
During the course of the Ponzi scheme, approximately 5,000 individuals invested a total of more than $400 million in Agape and AMA. Although some investors succeeded over the years in making full or partial withdrawals, particularly before the Ponzi scheme began to unravel, approximately 4,100 investors sustained actual losses totaling approximately $179 million.
On October 14, 2011, Cosmo was sentenced to a term of imprisonment of 25 years in United States v. Nicholas Cosmo, 09 CR 255 (DRH), for his role in the scheme.
If convicted, the defendants face a maximum sentence of 20 years’ imprisonment on each count.
The government’s case is being prosecuted by Assistant United States Attorneys Christopher C. Caffarone, Grace M. Cucchissi, and Vincent Lipari.
The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.
Defendants:
Bryan Arias
Age: 40
Maspeth, New York
Anthony Ciccone
Age: 41
Locust Valley, New York
Diane Kaylor
Age: 37
Bethpage, New York
Jason Keryc
Age: 36
Wantagh, New York
Shamika Luciano
Age: 31
Coram, New York
Showing posts with label indictment. Show all posts
Showing posts with label indictment. Show all posts
Wednesday, December 18, 2013
Monday, October 28, 2013
Former Brokerage Firm Operations Head Indicted for Tax Crimes
WASHINGTON—An indictment was unsealed today charging Dominick Pannitti, formerly of North Bellmore, New York, with tax crimes, the Justice Department announced.
According to the indictment, which was returned by a grand jury on September 26, 2013, Pannitti was head of operations at a securities brokerage firm in Syosset, New York. The securities firm had an automated system designed to adjust customers’ trading accounts for amounts less than $1,000. During 2005 and 2006, Pannitti used the automated system to credit his own trading accounts hundreds of times in increments less than $1,000. Pannitti was not entitled to most of these credits, which totaled over $570,000. Pannitti concealed from his accountant the income he obtained and failed to report the income on his tax returns.
A trial date has not been scheduled. An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. Pannitti faces a potential maximum sentence of eight years in prison and a potential fine of up to $500,000.
The case was investigated by the Internal Revenue Service (IRS)-Criminal Investigation and the FBI. The case is being prosecuted by Trial Attorneys Mark Kotila and Jeffrey Bender of the Justice Department’s Tax Division.
According to the indictment, which was returned by a grand jury on September 26, 2013, Pannitti was head of operations at a securities brokerage firm in Syosset, New York. The securities firm had an automated system designed to adjust customers’ trading accounts for amounts less than $1,000. During 2005 and 2006, Pannitti used the automated system to credit his own trading accounts hundreds of times in increments less than $1,000. Pannitti was not entitled to most of these credits, which totaled over $570,000. Pannitti concealed from his accountant the income he obtained and failed to report the income on his tax returns.
A trial date has not been scheduled. An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt. Pannitti faces a potential maximum sentence of eight years in prison and a potential fine of up to $500,000.
The case was investigated by the Internal Revenue Service (IRS)-Criminal Investigation and the FBI. The case is being prosecuted by Trial Attorneys Mark Kotila and Jeffrey Bender of the Justice Department’s Tax Division.
Wednesday, October 16, 2013
Former Freeport principal indicted on sex charges
FREEPORT, N.Y. (WABC) -- More charges were added on at the indictment of the former middle school principal who is accused of having sex with a teen.
John O'Mard had an unmistakable smile on his face as he was walked into court Tuesday afternoon.
The 45-year-old is the former principal of Freeport J.W. Dodd Middle School and he was arrested last April.
He was formally indicted Tuesday on charges that he had non-consensual sex with a 16-year-old boy he met online.
The suspect's father and mother are sticking by him.
"I love him very much, and he's a wonderful man," his parents said.
Prosecutors tacked on charges alleging that O'Mard lied to state education officials about his criminal past which include grand larceny some 20 years ago.
"Freeport knew it when they hired him, but when things went sour they weren't enthralled by him anymore they decided to being this to light," said Edward Jenks, O'Mard's attorney.
O'Mard was later released on $15,000 bond.
O'Mard had to turn in his passport. He's facing 14 years behind bars.
John O'Mard had an unmistakable smile on his face as he was walked into court Tuesday afternoon.
The 45-year-old is the former principal of Freeport J.W. Dodd Middle School and he was arrested last April.
He was formally indicted Tuesday on charges that he had non-consensual sex with a 16-year-old boy he met online.
The suspect's father and mother are sticking by him.
"I love him very much, and he's a wonderful man," his parents said.
Prosecutors tacked on charges alleging that O'Mard lied to state education officials about his criminal past which include grand larceny some 20 years ago.
"Freeport knew it when they hired him, but when things went sour they weren't enthralled by him anymore they decided to being this to light," said Edward Jenks, O'Mard's attorney.
O'Mard was later released on $15,000 bond.
O'Mard had to turn in his passport. He's facing 14 years behind bars.
Tuesday, September 24, 2013
Former President of Qualcomm’s Global Business Operations Indicted for Insider Trading
WASHINGTON—Jing Wang, 51, of Del Mar, California, a former executive vice president and president of Global Business Operations for Qualcomm Inc., was charged with insider trading in shares of both Qualcomm and Atheros Communications Inc. using a secret brokerage account and an offshore shell company in the British Virgin Islands. Wang was also charged with conspiring with his brother, co-defendant Bing Wang, 53, and his former stock broker to obstruct an ongoing U.S. Securities and Exchange Commission (SEC) investigation and laundering the proceeds of his insider trading using a second offshore shell company and secret brokerage account.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California made the announcement.
“Insider trading is an insidious crime. It undermines ordinary investors’ faith in our financial markets, and the Justice Department has zero tolerance for it,” said Acting Assistant Attorney General Raman. “Today’s charges show that you cannot trade on inside information, pocket the profit, and expect to get away with it. The Criminal Division has had a terrific partnership with the U.S. Attorney’s Office for the Southern District of California in this important investigation, and through partnerships like these throughout the country, we will continue to root out fraud in our markets at every level.”
“When there are two sets of rules—one for the powerful insiders and one for everybody else—the public quickly loses confidence in the stock market,” said U.S. Attorney Duffy. “We intend to restore confidence in our markets by making sure that everyone is playing by the same rules.”
Jing Wang was taken into custody by the FBI earlier today on these charges and is expected to make his initial appearance in federal court in the Southern District of California this afternoon. A warrant has been issued for the arrest of Bing Wang, who is believed to be a citizen and resident of China. Both men are charged in an indictment with conspiracy, which carries a maximum penalty of five years in prison. Jing Wang was also charged with securities fraud, money laundering, and obstruction of official proceedings, which each carry a maximum penalty of 20 years in prison, and aggravated identity theft, which carries a mandatory two years in prison, consecutive to any other sentence.
The former stock broker, Gary Yin, was charged with conspiracy in a criminal information filed today in the Southern District of California and is expected to make his initial appearance on September 24, 2013, at 10:00 a.m. in federal court in San Diego.
According to the indictment, Jing Wang used his Merrill Lynch broker, Yin, to create an offshore entity, Unicorn Global Enterprises, in the British Virgin Islands and to open a brokerage account for Unicorn at Merrill Lynch. Jing Wang provided documents to Yin to create the false impression that his brother, Bing Wang, controlled the account, when in fact Jing Wang was the true owner of the account. This allowed Jing Wang to conceal his true ownership and control of the assets in the account and to avoid reporting to U.S. tax authorities. Significantly, it also allowed Jing Wang to disguise his involvement secreting tens of thousands of dollars for use in China.
The indictment alleges that after the creation of the Unicorn account, Jing Wang was named an executive vice president of Qualcomm and fell within the company’s insider trading restrictions for officers. As an officer, Wang was exposed to Qualcomm’s confidential business information and was repeatedly notified that he was not permitted to use material, non-public information to engage in stock transactions.
Among the inside information learned by Jing Wang because of his senior position was the fact that in the first quarter of 2010, Qualcomm was poised to announce an increased quarterly dividend and a stock repurchase program. On March 1, 2010, Jing Wang allegedly acted on this material, non-public information and directed Yin to purchase as much Qualcomm stock as possible in the Unicorn account before the information became public. After the close of trading on March 1, 2010, Qualcomm issued a press release announcing the dividend increase and stock repurchase program, and the company’s stock appreciated approximately 10 percent in value.
According to the indictment, Jing Wang next allegedly engaged in insider trading when he learned that Qualcomm was interested in purchasing Atheros. On December 1, 2010, acting on this information, Jing Wang met with Yin and instructed him to sell all Qualcomm shares in the Unicorn account. Jing Wang then told Yin to make preparations to purchase Atheros with the funds in the account but to wait for further confirmation. Jing Wang’s broker proceeded to liquidate all of the illegally held Qualcomm stock in the Unicorn account, resulting in ill-gotten gains of approximately $94,709 from the earlier insider trading.
On December 6, 2010, while attending a meeting of Qualcomm’s Board of Directors in Hong Kong, Jing Wang learned that the board had authorized Qualcomm to make a non-public offer to purchase Atheros for $45 per share. Later that same day, Jing Wang allegedly called Yin in San Diego and instructed him to use all available funds in the secret Unicorn account to purchase Atheros stock. The broker followed Jing Wang’s instructions and purchased 10,800 shares at approximately $34 per share, for a total of $366,766.
Qualcomm’s offer to purchase Atheros remained confidential until an article appeared in the Dealbook section of the New York Times’ website on January 4, 2011, and Qualcomm made an official announcement of the deal on January 5, 2011. Between the close of trading on January 3, 2011, and the close of trading on January5, 2011, the price of Atheros stock jumped from approximately $37 to $44.50—an increase of approximately 20 percent.
The indictment alleges that Jing Wang engaged in a third incident of insider trading on January 25, 2011, when he learned that Qualcomm was about to release record financial results. Immediately prior to announcement of those earnings, Jing Wang directed Yin to sell all the Atheros stock in the Unicorn account and purchase Qualcomm stock. The broker sold all Jing Wang’s illegally purchased Atheros stock for $44.60 per share and used all the proceeds to purchase Qualcomm stock at $50.87 per share. The following day, after Qualcomm announced the record earnings results, Qualcomm’s stock price increased by approximately $4 per share. All told, Jing Wang illegally gained approximately a quarter of a million dollars from these three illegal transactions.
The indictment and criminal information further allege that in order to conceal his insider trading, Jing Wang conspired with Yin and his brother, Bing Wang, to conceal Jing Wang’s control of the Unicorn account and his illegal purchases of Qualcomm and Atheros stock. Yin and Bing Wang agreed to assist Jing Wang, and the three defendants engaged in a number of activities to obstruct any investigation of the trades, as well as to conceal Jing Wang’s control of the Unicorn account. These obstructive acts included concocting a false cover story that would blame Bing Wang for the illegal trades in Qualcomm and Atheros, concealing Jing Wang’s actual control of the Unicorn account from Merrill Lynch, and transferring the proceeds of Jing Wang’s insider trading to another offshore entity nominally owned by Jing Wang’s mother.
For example, in carrying out the obstruction, the indictment alleges that in January 2012, Jing Wang forged the signature of his mother and used her identification documents to create another British Virgin Islands entity called Clearview Resources Ltd. At Jing Wang’s instruction, Yin created a Merrill Lynch account for Clearview and attempted to further distance Jing Wang from the transactions by transferring all the money in the Unicorn account to the Clearview account in a series of structured transactions.
Another example of obstructive conduct alleged in the indictment took place in March 2012, when Jing Wang met with Yin and explained that the SEC was investigating Qualcomm. At that time, Jing Wang told Yin he was worried that his control of the Unicorn account and insider trading would be discovered. By that time, the SEC had already issued a subpoena to Jing Wang calling for him to produce information about any brokerage accounts he controlled. Jing Wang pressed Yin to stick to the false cover story he had created earlier—that his brother, Bing Wang, had made the illegal trades. Soon afterwards, Jing Wang gave Yin a number of Merrill Lynch documents related to his Unicorn account and directed Yin to take the documents to China, give them to Bing Wang, and help his brother use them to corroborate the false cover story. Yin agreed, and during two trips to China in 2012, Yin met with Bing Wang, provided him with Unicorn documents removed from the United States, and rehearsed the false cover story. The indictment further alleges that after these meetings, Bing Wang and Yin sent e-mails to each other containing false and misleading statements in order to make it appear that Bing Wang actually controlled the Unicorn and Clearview accounts.
This case was investigated by the FBI and the Internal Revenue Service–Criminal Investigation. The SEC’s Los Angeles Regional Office also provided assistance, and the SEC today filed a civil complaint against Jing Wang and Yin in federal court in San Diego.
This case is being prosecuted by Trial Attorney James McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Eric J. Beste, John Parmley, and Timothy Perry of the Southern District of California.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Laura E. Duffy of the Southern District of California made the announcement.
“Insider trading is an insidious crime. It undermines ordinary investors’ faith in our financial markets, and the Justice Department has zero tolerance for it,” said Acting Assistant Attorney General Raman. “Today’s charges show that you cannot trade on inside information, pocket the profit, and expect to get away with it. The Criminal Division has had a terrific partnership with the U.S. Attorney’s Office for the Southern District of California in this important investigation, and through partnerships like these throughout the country, we will continue to root out fraud in our markets at every level.”
“When there are two sets of rules—one for the powerful insiders and one for everybody else—the public quickly loses confidence in the stock market,” said U.S. Attorney Duffy. “We intend to restore confidence in our markets by making sure that everyone is playing by the same rules.”
Jing Wang was taken into custody by the FBI earlier today on these charges and is expected to make his initial appearance in federal court in the Southern District of California this afternoon. A warrant has been issued for the arrest of Bing Wang, who is believed to be a citizen and resident of China. Both men are charged in an indictment with conspiracy, which carries a maximum penalty of five years in prison. Jing Wang was also charged with securities fraud, money laundering, and obstruction of official proceedings, which each carry a maximum penalty of 20 years in prison, and aggravated identity theft, which carries a mandatory two years in prison, consecutive to any other sentence.
The former stock broker, Gary Yin, was charged with conspiracy in a criminal information filed today in the Southern District of California and is expected to make his initial appearance on September 24, 2013, at 10:00 a.m. in federal court in San Diego.
According to the indictment, Jing Wang used his Merrill Lynch broker, Yin, to create an offshore entity, Unicorn Global Enterprises, in the British Virgin Islands and to open a brokerage account for Unicorn at Merrill Lynch. Jing Wang provided documents to Yin to create the false impression that his brother, Bing Wang, controlled the account, when in fact Jing Wang was the true owner of the account. This allowed Jing Wang to conceal his true ownership and control of the assets in the account and to avoid reporting to U.S. tax authorities. Significantly, it also allowed Jing Wang to disguise his involvement secreting tens of thousands of dollars for use in China.
The indictment alleges that after the creation of the Unicorn account, Jing Wang was named an executive vice president of Qualcomm and fell within the company’s insider trading restrictions for officers. As an officer, Wang was exposed to Qualcomm’s confidential business information and was repeatedly notified that he was not permitted to use material, non-public information to engage in stock transactions.
Among the inside information learned by Jing Wang because of his senior position was the fact that in the first quarter of 2010, Qualcomm was poised to announce an increased quarterly dividend and a stock repurchase program. On March 1, 2010, Jing Wang allegedly acted on this material, non-public information and directed Yin to purchase as much Qualcomm stock as possible in the Unicorn account before the information became public. After the close of trading on March 1, 2010, Qualcomm issued a press release announcing the dividend increase and stock repurchase program, and the company’s stock appreciated approximately 10 percent in value.
According to the indictment, Jing Wang next allegedly engaged in insider trading when he learned that Qualcomm was interested in purchasing Atheros. On December 1, 2010, acting on this information, Jing Wang met with Yin and instructed him to sell all Qualcomm shares in the Unicorn account. Jing Wang then told Yin to make preparations to purchase Atheros with the funds in the account but to wait for further confirmation. Jing Wang’s broker proceeded to liquidate all of the illegally held Qualcomm stock in the Unicorn account, resulting in ill-gotten gains of approximately $94,709 from the earlier insider trading.
On December 6, 2010, while attending a meeting of Qualcomm’s Board of Directors in Hong Kong, Jing Wang learned that the board had authorized Qualcomm to make a non-public offer to purchase Atheros for $45 per share. Later that same day, Jing Wang allegedly called Yin in San Diego and instructed him to use all available funds in the secret Unicorn account to purchase Atheros stock. The broker followed Jing Wang’s instructions and purchased 10,800 shares at approximately $34 per share, for a total of $366,766.
Qualcomm’s offer to purchase Atheros remained confidential until an article appeared in the Dealbook section of the New York Times’ website on January 4, 2011, and Qualcomm made an official announcement of the deal on January 5, 2011. Between the close of trading on January 3, 2011, and the close of trading on January5, 2011, the price of Atheros stock jumped from approximately $37 to $44.50—an increase of approximately 20 percent.
The indictment alleges that Jing Wang engaged in a third incident of insider trading on January 25, 2011, when he learned that Qualcomm was about to release record financial results. Immediately prior to announcement of those earnings, Jing Wang directed Yin to sell all the Atheros stock in the Unicorn account and purchase Qualcomm stock. The broker sold all Jing Wang’s illegally purchased Atheros stock for $44.60 per share and used all the proceeds to purchase Qualcomm stock at $50.87 per share. The following day, after Qualcomm announced the record earnings results, Qualcomm’s stock price increased by approximately $4 per share. All told, Jing Wang illegally gained approximately a quarter of a million dollars from these three illegal transactions.
The indictment and criminal information further allege that in order to conceal his insider trading, Jing Wang conspired with Yin and his brother, Bing Wang, to conceal Jing Wang’s control of the Unicorn account and his illegal purchases of Qualcomm and Atheros stock. Yin and Bing Wang agreed to assist Jing Wang, and the three defendants engaged in a number of activities to obstruct any investigation of the trades, as well as to conceal Jing Wang’s control of the Unicorn account. These obstructive acts included concocting a false cover story that would blame Bing Wang for the illegal trades in Qualcomm and Atheros, concealing Jing Wang’s actual control of the Unicorn account from Merrill Lynch, and transferring the proceeds of Jing Wang’s insider trading to another offshore entity nominally owned by Jing Wang’s mother.
For example, in carrying out the obstruction, the indictment alleges that in January 2012, Jing Wang forged the signature of his mother and used her identification documents to create another British Virgin Islands entity called Clearview Resources Ltd. At Jing Wang’s instruction, Yin created a Merrill Lynch account for Clearview and attempted to further distance Jing Wang from the transactions by transferring all the money in the Unicorn account to the Clearview account in a series of structured transactions.
Another example of obstructive conduct alleged in the indictment took place in March 2012, when Jing Wang met with Yin and explained that the SEC was investigating Qualcomm. At that time, Jing Wang told Yin he was worried that his control of the Unicorn account and insider trading would be discovered. By that time, the SEC had already issued a subpoena to Jing Wang calling for him to produce information about any brokerage accounts he controlled. Jing Wang pressed Yin to stick to the false cover story he had created earlier—that his brother, Bing Wang, had made the illegal trades. Soon afterwards, Jing Wang gave Yin a number of Merrill Lynch documents related to his Unicorn account and directed Yin to take the documents to China, give them to Bing Wang, and help his brother use them to corroborate the false cover story. Yin agreed, and during two trips to China in 2012, Yin met with Bing Wang, provided him with Unicorn documents removed from the United States, and rehearsed the false cover story. The indictment further alleges that after these meetings, Bing Wang and Yin sent e-mails to each other containing false and misleading statements in order to make it appear that Bing Wang actually controlled the Unicorn and Clearview accounts.
This case was investigated by the FBI and the Internal Revenue Service–Criminal Investigation. The SEC’s Los Angeles Regional Office also provided assistance, and the SEC today filed a civil complaint against Jing Wang and Yin in federal court in San Diego.
This case is being prosecuted by Trial Attorney James McDonald of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Eric J. Beste, John Parmley, and Timothy Perry of the Southern District of California.
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