News and Press Releases

Man Who Operated Allegedly Fraudulent Firm that Promised Profits from Internet Ads Arrives in U.S. after Being Fugitive for 12 Years

May 24, 2012

LOS ANGELES – A former resident of Newport Beach who fled the country in 1999 after federal authorities executed a search warrant at his allegedly fraudulent Internet company arrived in the United States today after being deported earlier this week from Malaysia.

James S. Eberhart, 71 arrived this morning at Los Angeles International Airport and is expected to make his initial appearance this afternoon in United States District Court in Los Angeles.

The FBI received a tip as to Eberhart’s whereabouts in Maylasia. The FBI had actively been seeking information from the public on its website (see: The FBI Legal Attaché in Kuala Lumpur coordinated the information with authorities in Maylasia. Malaysia deported Eberhart because his United States passport had expired.

A 2002 grand jury indictment alleges that Eberhart and another man – Eugene M Carriere – operated a fraudulent Newport Beach company called YES Entertainment Network, Inc. Eberhart is specifically charged with 11 counts of mail fraud and 9 counts of money laundering.

Using telemarketers at outside firms and written promotional materials, Eberhart and Carriere solicited investors by claiming that YES was creating and maintaining an 18-channel, multimedia, family-oriented website. Prospective investors were told that YES would generate profits through the sale of advertising on the website.

Between February 1999 and October 1999, Carriere and Eberhart allegedly raised nearly $14 million in investor funds through a network of nearly two dozen telemarketing “boiler rooms” across the United States and Canada.

Once YES received money from investors, 45 percent of those funds were given to the outside telemarketers as a sales commission, according to the indictment, which goes on to allege that the remaining investor funds primarily went to Carriere and Eberhart.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
Carriere, 63, was a fugitive for six years before being arrested in Thailand in April 2005. Carriere pled guilty to two counts of mail fraud on April 30, 2007, and on July 27, 2007, was sentenced to three years in federal prison and ordered to pay $12,838,045 in restitution.

Previously in this investigation, five other defendants, including the owners of telemarketing operations used by YES, were indicted, pleaded guilty and were sentenced to as much as 142 months in federal prison.

This case is the product of an investigation by the Federal Bureau of Investigation and the United States Postal Inspection Service.

Release No. 12-068

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