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. 3582(c)(1)(A) (requiring a consideration of the 3553(a) factors before granting compassionate release). He said Wannakuwatte spent the money on personal and business expenses. Losses incurred by the victim financial institutions often threatened their financial stability and reputations. Guru was arrested by Indian authorities 2012 and charged with conspiracy and cheating after the scheme unraveled. Make your practice more effective and efficient with Casetexts legal research suite. - And if you think youve been scammed, report it to the Securities and Exchange Commission, your states securities regulator, or a law enforcement agency. 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. Based on these representations, IMG and RelyAid raised at least $125 million from numerous investors. 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. 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. Unfortunately, it wasnt. Defendant Deepal Wannakuwatte has pleaded guilty to running a massive Ponzi scheme and agreed to forfeit various assets connected to that fraud scheme, including sixteen real properties, four vehicles, twenty-one bank accounts, three life insurance policies, seven checks/money orders and two partnership interests. A former owner of the Sacramento Capitals professional tennis team, Wannakuwatte purchased properties in Hawaii, Oregon and California. On February 4, 2014, the Capitals, after 28 seasons in Sacramento, announced their move to Las Vegas. To the contrary, it appears USP Lompoc was capable of adequately monitoring and caring for Defendant when he was previously diagnosed with COVID-19. Stock Market Crash Alert: Mark Your Calendars for May 3. 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. 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 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. See, e.g., United States v. Eberhart, No. 1125 N. Charles St, Baltimore, MD 21201. The fraud has aged him and I pray daily he will survive.. 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. In addition, Persaud touted his status as a certified financial planner to assure investors that their funds were safe. Defendant has not met his burden. Red flags, copy-with-cite, case summaries, annotated statutes and more. 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. A locked padlock 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. In the instant case, it is undisputed that Defendant has met the threshold exhaustion requirement. He has been held without bail since his arrest in late February. After college, he moved to Sacramento, started his company and became a fixture on the areas tennis scene. 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 schemes in the regions history. He essentially overpaid, using the victims money, said U.S. Attorney Benjamin Wagner at a news conference following Wannakuwattes court appearance. IMG's CEO, Deepal Wannakuwatte, told banks and investors that IMG had a $100-million contract with the U.S. Department of Veterans' Affairs ("VA") to provide medical gloves at facilities around the countrysubject only to his ability to raise capital to purchase or import the gloves from Asia. Share sensitive information only on official, secure websites. The dependable returns, as well as the use of advertising featuring popular Indian film stars, caused the scheme to spread like wildfire. 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. Wannakuwatte has been in custody since his arrest on February 21, 2014. Official websites use .gov (ECF No. Secure .gov websites use HTTPS The investigation determined that Wannakuwatte told his investors that two of his companies were involved in the international sale of latex gloves and that it did business with government agencies, in particular the Department of Veterans Affairs (VA). Many of the victims will never be made whole, Wagner said. 3582(c); see Dillon v. United States, 560 U.S. 817, 824-25 (2010). An official website of the United States government. Based on the record before it, the Court cannot say that the past prevalence of the disease at USP Lompoc puts Defendant at great and particularized risk. Have a question about Government Services? At Wannakuwattes direction, the IMG employee pretended to be a VA representative. The Sacramento, California businessman operated a $230 million medical glove Ponzi scheme. . In addition to prison time, each of the men was ordered to pay restitution to scheme victims. See U.S.S.G. 501 I Street, Suite 10-100 Real-time updates and all local stories you want right in the palm of your hand. This story was originally published May 8, 2014, 12:11 PM. /// /// /// /// /// /// /// ///. 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. More specifically, the "extraordinary and compelling" requirement is met where a defendant is: (i) suffering from a terminal illness; or (ii) suffering from a serious physical or medical condition, serious functional or cognitive impairment, or deteriorating physical or mental health because of the aging process, "that substantially diminishes the ability of the defendant to provide self-care within the environment of a correctional facility and from which he or she is not expected to recover." Put another way, a Ponzi scheme was uncovered, on average, once every four days from 2008 to 2013. Defendant cites the conditions of his confinement at USP Lompoc as an additional factor in his vulnerability. 1B1.13. FBI.gov is an official site of the U.S. Department of Justice. No Thanks There is no amount of time I can sentence you to that would appease your victims., 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. No Thanks 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. He purchased the Capitols with his ill-gotten gains and moved them to Las Vegas in February 2014. Kamir Abou Najm performed research work for the universitys Miller Lab, which studies early signs of autism and ADHD. Wannakuwatte pleaded guilty unusually early in the process. His partner in the Capitals, a Fair Oaks man named Ramey Osborne, wound up loaning Wannakuwatte about $456,000, according to bankruptcy court records. These claims were not true but were made in order to appear more credit worthy. 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. The compassionate release provision of 18 U.S.C. 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. We thank the IRS Criminal Investigation and FDIC Office of Inspector General for their partnership throughout this investigation. Dressed in a grubby jail-issued orange jumpsuit, Wannakuwatte, 63, pleaded guilty Thursday to a single count of wire fraud in U.S. District Court. 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 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 will also surrender $8 million to $12 million worth of federal income tax refunds. A New York man was accused of using his position as head of a soccer club to dupe investors out of more than $5 million in a Ponzi scheme that purportedly financed the sale of cigarettes to a Native American Indian reservation. 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 a Ponzi scheme, early investors often get repaid with dollars pumped in by newcomers. 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. Instead, Rocco was accused of operating a Ponzi scheme that used investor funds to pay returns. 3582(c)(1)(A)(i). 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 . 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. 95814, Telephone:(916) 554-2700 The tax refunds and other assets will be eventually distributed among his victims, but its all but certain they wont get full recovery. ) or https:// means youve safely connected to the .gov website. . 3553(a) (" 3553(a)") factors do not support a reduced sentence. FBI, Penn State offer online death notification training for first responders. 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. The sentence wasnt a surprise; it matched the terms of a plea agreement Wannakuwatte made with prosecutors in May. The case began in September 2013, when our Sacramento office was contacted by a representative of one of Wannakuwattes business associates who thought he might be the victim of a Ponzi scheme. Bernie Madoff became a household name after his arrest in December 2008 for the largest Ponzi scheme in history. Former Sacramento Capitals World TeamTennis owner Deepal Wannakuwatte was sentenced Thursday in federal court in Sacramento to 20 years in prison for his long-running fraud. For example, a $257 invoice was modified to create a $12 million invoice. UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA. Court records show that the companys revenue last year totaled less than $5 million. An official website of the United States government. Viking advertised itself as operating a high-yield, low-risk investment strategy that offered above-average returns by making secured loans to borrowers at inflated interest rates. Share sensitive information only on official, secure websites. 3582 (C) (1) (A) (i). He was ordered by a federal judge last month to pay millions in restitution to his victims, FBI.gov is an official site of the U.S. Department of Justice. From 2005 to 2010, the Hibberts oversaw a congregation at the Masonic Church of God in Torontos east end. The warden denied Defendant's request on May 13, 2020. 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. Full title:UNITED STATES OF AMERICA, Plaintiff, v. DEEPAL WANNAKUWATTE, Defendant. 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. As part of his plea agreement, Wannakuwatte will file for bankruptcy protection and forfeit more than $330,000 in bank accounts to the government, along with 16 pieces of property, including his South Land Park house and vacation homes in Hawaii, Oregon and Sonoma County. 135. 2:14-cr-00067-TLN (E.D. 135.) Persaud is currently serving a three-year sentence in federal prison. Wannakuwatte has filed for bankruptcy protection. 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. 1B1.13, cmt. He claimed the funds obtained through the line of credit would be used to improve a glove manufacturing facility he owned in Olivehurst. Defaults against these defendants were entered on April 21, 2014. And while his victims suffered, Wannakuwatte purchased luxury homes, vehicles, airplanes, and even a professional tennis team. - Check with federal and state securities regulators to find out if there have been any complaints against the company or person youre thinking of doing business with. 24, 2020). Toronto police have also been unable to account for several million dollars, which they believe was diverted to an offshore bank account in Panama. 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. Jordan Maglich is a securities attorney with Wiand Guerra King P.L. Call The Bees Dale Kasler, (916) 321-1066. Share sensitive information only on official, secure websites. 13-CR-00313-PJH-1, 2020 WL 1450745, at *2 (N.D. Cal. The judge called him a liar and his victims labeled him a cheater and a sociopath. Wannakuwatte ran a Ponzi scheme in California through his company, International Manufacturing Groupone where money from new investors goes to interest payments from older investorsfor nearly a decade before the scam imploded in 2014. When Hoopers mother died four years ago, Wannakuwatte attended the funeral. - Be extremely cautious about unsolicited offers to invest. In total, Sundown raised more than $7 million from over 150 investors. by 2Paragraphs in Culture | August 17, 2016, Deepal Wannakuwatte, American Greed (CNBC). RelyAid did have one contract with the Department but it was worth only $25,000. In total, the venture raised over $10 million from at least 40 investors. watch now. 00:43. 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. The companies came under suspicion after a creditor filed a lawsuit alleging nonpayment of a loan. Additionally, Hibbert and his wife diverted investor funds for their own personal use, including the purchase of luxury automobiles and real estate. 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. 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. To date, prosecutors have obtained at least 14 convictions including a guilty plea from Madoffs brother, Peter Madoff. A Toronto pastor and his wife were accused of defrauding more than 200 parishioners out of nearly $9 million under the ruse that they were generating above-average returns through dabbling in foreign-currency trading. ECF No. If convicted, Wannakuwatte faces a maximum sentence of 30 years in prison and a $1million fine for each count. (ECF No. (Id. Modelled Employees (all sites): ? As a whole, Defendant's arguments about COVID-19 are too general and wide-ranging. A lock () or https:// means you've safely connected to the .gov website. In total, nearly 5,000 investors invested in Madoffs scheme. GDC Stock Alert: Why Is GD Culture Group Up 700% Today? 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. Additionally, investor funds were used to support the lavish lifestyle of Persaud and his family members. Promptly, on the next day, the pending motions to set aside the defaults were filed. 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. However, the payment of these returns is made not from legitimate business activities, but rather from incoming funds from new investors. For instance: Also interesting: The correlation of Ponzi schemes uncovered to the financial crisis is arguably strong. Lock There are 20 individuals that go by the name of Deepal Wannakuwatte. (ECF No. Fax Line:(916) 554-2900. Lock Heller denied that. While tracing its origin back at least 80 years, the past decade has been unprecedented in terms of the number and severity of Ponzi schemes. In early February, he announced he was moving the team to Las Vegas because he couldnt secure a permanent home stadium for the Capitals in Sacramento. Subscribe Investors are promised above-average returns that generally carry little risk. The scheme, which spanned decades, ultimately caused at least $17 billion in losses to thousands of investors. 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. 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. Email Email. On June 18, 2020, Defendant filed the instant pro se motion for release pursuant to 18 U.S.C. From behind cars, Deepal Wannakuwatte tries to convince his own mother his sentencing isn't nearly as bad as it sounds. Deepal took full advantage of him in any way he could, she wrote. Police see link to similar incidents. In 2013, Wannakuwatte claimed to have more than $125 million in VA contracts alone. 138 at 9-15. 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. Investors were told that their VCM would be placed in a business where it could generate lucrative profits that allowed the payout of annual returns of 80% to 120%. In sentencing Wannakuwatte, Judge Nunley told the defendant, You embody true evil. For the reasons set forth below, the Court DENIES Defendant's motion. A .gov website belongs to an official government organization in the United States. (ECF No. 135.) 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. Share on Facebook Facebook Upon receiving funds, Wannakuwatte used the money to pay outstanding debts unrelated to the purpose of the loan. n. 1(A). Next: Online Auction Revealed to Be $500 Million Ponzi Scheme. 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. 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. Nine of his victims made statements to the court, either in person or by letters read out loud by the prosecutor. The rebranded Las Vegas Neon went defunct almost immediately after his arrest. 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. (David Becker/Las Vegas Review-Journal File) | Las Vegas Review-Journal. Many of these so-called net winners later faced clawback lawsuits by the court-appointed bankruptcy trustee seeking to recover funds for Madoffs victims who were not as fortunate. The functioning of a Ponzi scheme is inherently simple. A .gov website belongs to an official government organization in the United States. Assistant United States Attorneys Michael Beckwith and Kevin Khasigian are prosecuting the case. 138.) Deepal, you are a sociopath, he said. Professional and Commercial Equipment and Supplies Merchant Wholesalers Merchant Wholesalers, Durable Goods Wholesale Trade Printer Friendly View Address: 879 F St Ste 120 West Sacramento, CA, 95605-2384 United States Phone: ? . 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. See 18 U.S.C. Michael Hooper, a Carmichael man who lost more than $200,000, recalled how Wannakuwatte ingratiated himself with his victims. "It's imperative that people do background checks on any kind of person they are going to do business with," said David Schassler, a licensed private investigator in New . 95814, Telephone:(916) 554-2700 Court:UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA. In fact, while he did have a contract with the VA, it was only worth up to $25,000 a year. The impact on the victims in this case was often devastating. Victims are expected to recover at least 50% of their losses. Joseph Signore, his wife Laura Signore, Paul Schumack and Craig Allen Hipp were recently arrested on multiple fraud charges stemming from their roles in JCS Enterprises. The Government filed an opposition. How to Send Money To Deepal Wannakuwatte's Inmate Trust Fund! 18 U.S.C. Defendant is currently serving his sentence at USP Lompoc. Wannakuwatte offered his investors several different bogus high-yield investment opportunities, most of which related to his purported relationship with the VA. And to prove his bona fides to potential investors and to lenders he was trying to borrow money from, he showed them phony corporate documents as well as actual personal and corporate tax returns where he had reported and paid taxes that falsely overstated his personal income and annual gross receipts and sales for IMG. In addition to fulfilling their divine duties, Mr. Hibbert told parishioners he could generate monthly returns of up to 8.5% through his skills as a foreign currency trader. (Id.) Next: M.S. Of the roughly 510 schemes represented in the database, the average Ponzi scheme size was $98.3 million, while the median scheme size was $10 million. Under Wannakuwattes plea deal, both the government and defense recommended a 20-year prison term. 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. 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. 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. 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. Three men were sent back to federal prison after they concocted a Ponzi scheme in prison that promised lucrative returns through the distribution of comic book rights. Sundown lured investors by promising returns on short-term investments of up to 150%. 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. The total value of the properties, vehicles, business interests, and bank accounts is estimated to be at least $3.5 million. Coincidentally, a related company funded with investor funds was, until recently, the beneficiary of an investment by Barbara Corcoran a star of CNBCs hit show Shark Tank. D & A INTERNATIONAL IMPORT . Wannakuwattes companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. Today hes an admitted felon, awaiting a likely 20-year prison term, exposed as possibly the most prolific con artist in Sacramento history. 20.) 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.
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