For Immediate Release
October 31, 2001
United States Attorney Jim Letten, Kenneth Kaiser, Special Agent in Charge of the New Orleans Division of the Federal Bureau of Investigation, Terry Stuart, Special Agent in Charge of the New Orleans Field Office of the Internal Revenue Service, Criminal Investigation Division, and Colonel Terry Landry, Louisiana State Police, announced today the indictment of seven defendants and the arrest of six of those defendants for their part in a major investment fraud scheme that it is alleged obtained approximately 23 million dollars through the sale of fraudulent promissory notes. The indictment alleges the scheme involved the sale of $18.8 million in promissory notes for the renovation of the Imperiale Hotel in Taormina, Sicily; and an addition $4.5 million in promissory notes for the financing of an Azerbaijan oilfield clean up and recovery business.
Named as defendants in the indictment, which was filed on October 5, 2001, and sealed awaiting coordination with Belgian authorities, are Hendrik Rienstra, age 72, and Richard Rienstra, age 45, both of Brussels, Belgium; Jean Noel Pineau, age 46, of Mandeville, LA; Cedric Vaumoron, age 28, of Metairie, LA; Joseph Aguda, age 62, of New Orleans, LA; Craig Brown, age 52, of Mankato, MN; and Jed Karpinski, age 40, of Lancaster, PA. All of the defendants are charged with one count of conspiracy to commit mail fraud and all the defendants except for Vaumoron are also charged with thirty-three counts of mail fraud. Hendrik Rienstra, Richard Rienstra, Jean Noel Pineau, Joseph Aguda, and Craig Brown are also charged with one count of conspiracy to commit money laundering. Additionally, Hendrik Rienstra is charged with one count of conspiracy to defraud the Internal Revenue Service and three counts of tax evasion. The maximum penalties faced by each of these defendants are Hendrik Rienstra, 210 years imprisonment and fines of $10,000,000 or twice the gross loss to the victims; Richard Rienstra, Jean Noel Pineau, Joseph Aguda, and Craig Brown, 190 years imprisonment and fines of $9,000,000 or twice the gross loss to the victims; Jed Karpinski, 170 years imprisonment and fines of $8,500,000 or twice the gross loss to the victims; and Cedric Vaumoron, five years imprisonment and fines of $8,500,000 or twice the gross loss to the victims.
On October 30, 2001, arrests were coordinated between Brussels, Belgium, New Orleans, Louisiana, and Mankato, Minnesota. Hendrik Rienstra and Richard Rienstra were arrested by the Belgian Federal Police in Brussels, Belgium on provisional arrest warrants based on the indictment coordinated through the FBI’s Legal Attache Office. On the same day in the United States, Joseph Aguda, Jean Noel Pineau, and Cedric Vaumoron were arrested in the New Orleans area by the FBI, Louisiana State Police, and IRS. Craig Brown was arrested in Mankato, Minnesota, by FBI agents of the Mankato, Minnesota Resident Agency. A summons has been issued for the appearance of Jed Karpinski.
The indictment alleges that these defendants recruited financial advisors and insurance brokers and agents to sell promissory notes in a number of states by representing that repayment was guaranteed by New England International Surety, Inc., and Omne RE S.A., when they knew these companies had previously failed to fulfill guarantees on earlier projects.
The indictment also alleges that proceeds from the sale of these notes were then processed through offices in the New Orleans metropolitan area before being sent to banks elsewhere for deposit. According to the indictment, a large portion of the money received from the sale of promissory notes for these two projects was either siphoned off by defendants, used to pay sales commissions, or used to pay earlier investors. It is alleged approximately $2.4 million generated through the sale of these promissory notes was sent out of the United States to foreign accounts in order to place the funds beyond the reach of claimants and policyholders. The defendants also used money raised on these later projects to pay earlier investors in other projects in order to perpetuate and promote the scheme.
The indictment alleges the role of each of the defendants charged was as follow:
Hendrik Rienstra is alleged to have been the vice president and managing director of New England International Surety, a Panamanian corporation headquartered in Brussels, Belgium. As such, he oversaw the issuance of Taormina and Azerbaijan promissory notes and all significant financial transactions of New England and its subsidiaries.
Richard Rienstra is alleged to have been a managing director of New England and was involved on a managerial level in the issuance of Taormina and Azerbaijan promissory notes. He was also involved in significant financial transactions of New England and its subsidiaries, particularly with regard to the Azerbaijan project.
Jean Noel Pineau is alleged to have acted as an agent of New England and its subsidiary, Omne SRL, Inc., in their New Orleans and Metairie, Louisiana Offices and been responsible for the sale of Taormina and Azerbaijan promissory notes. It is also alleged that he received purchase checks for these notes and forwarded them for deposit into bank accounts controlled by his co-defendant Hendrik Rienstra.
Cedric Vaumoron is also alleged to have acted as an agent of New England and its subsidiary, Omne SRL, Inc., in their New Orleans and Metairie, Louisiana Offices and been directly involved in sale of Taormina and Azerbaijan promissory notes.
Joseph Aguda is alleged to have been the primary agent of New England in its New Orleans, Louisiana office. As such, he was involved in the sale of Taormina and Azerbaijan promissory notes and also handled claims made by noteholders in these and earlier New England “guaranteed” note programs. As such he lulled the noteholders into falsely believing that New England would fulfill its guarantees and pay them.
Craig Brown is alleged to have been one of the largest dealers in the sale of Taormina and Azerbaijan promissory notes. By making false representations about these projects and the ability of New England to pay the promissory notes it was guaranteeing, Brown sold notes to churches, church members and individual clients.
Jed Karpinski is alleged to have been one of the largest dealers in New England-backed promissory notes. By making false representations about these projects and the ability of New England to pay the promissory notes it was guaranteeing, Karpinski sold the notes to a large number of his clients.
This case is being investigated by the Federal Bureau of Investigation, Louisiana State Police, Internal Revenue Service, Criminal Investigation Division, with the assistance of the Travis County, Texas District Attorney’s Office, which is also pursuing Texas state criminal charges arising from the sale of fraudulent promissory notes, and the Texas State Securities Board. Assistant United States Attorneys Robert Boitmann and Michael Magner, along with Department of Justice Tax Division Attorney Barry Jonas, are prosecuting the case.
United States Attorney Jim Letten, speaking of the indictment, stated:
“The fine professionals in my office, as well as the FBI and the IRS, continue to demonstrate that the criminal justice components of the United States are more than equal to the multiple challenges which we now face. Indeed, even as we remain increasingly vigilant and aggressive in addressing potential threats to national security around the clock, we have not–and will not–permit our attention to threats from traditional, internal criminal acts to diminish. We will prevail on all fronts.”
In announcing the indictment United States Attorney Letten, Special Agent in Charge Kaiser, Special Agent in Charge Stuart and Colonel Landry emphasized that an indictment is merely an accusation and that the defendants named are presumed innocent until and unless proven guilty.