Winter Springs Man Sentenced To 5 Years For $11 Million Ponzi Scheme
Orlando, Florida - U.S. District Judge Charlene E. Honeywell sentenced Japheth Paramanandam (39, Winter Springs) to five years in federal prison last week for conspiracy to commit wire fraud, money laundering, and securities fraud. The court also ordered Paramanandam to pay $11,594,573.15 in restitution to more than 700 victims, and to forfeit more than $27,763.44 in assets, which are traceable to the proceeds obtained from the offenses. As part of Paramanandam's, the court also entered a money judgment in the amount of $15 million. To date, the United States Attorney’s Office has forfeited more than $9.6 million in assets in this case.
Paramanandam pled guilty on December 8, 2011. According to court documents, Paramanandam and his co-conspirators operated a fraud scheme through a Panamanian company by the name of Traders International Return Network (TIRN). TIRN was incorporated by Paramanandam and his co-conspirators in Panama City, Panama on June 16, 2008. David Merrick was the company’s president. Paramanandam was a promoter of the scheme.
Starting in May 2008, Paramanandam, Merrick, and their co-conspirators deceived investors by making claims, both via the internet and at business opportunity meetings, that investments in TIRN, would yield exceptionally high returns not achievable anywhere in the legitimate business world. Specifically, they claimed investors could receive between 9% and 22% in returns on their investment per month. TIRN advertised on its website that investments were made in the FOREX market, the buying and selling of commodities, the purchase of gold mines in Africa, and the buying and selling of real estate. These advertised investments were never actually made on behalf of TIRN's investors. TIRN investors were not specifically told where their money was being invested. TIRN's website merely indicated that it "pools investor funds" for the investments described above and that "professional money managers" manage such investments.
Federal law requires licensing and registration to serve as a pool operator for the purpose of purchasing commodities. Neither Paramanandam, Merrick, nor their co-conspirators held any type of investment license with the National Futures Association or the Commodities and Futures Trading Commission. In total, TIRN collected more than $15 million from more than 700 investors (both domestic and international).
Earlier this year, David Merrick was sentenced to eight years and one month in federal prison for money laundering and conspiracy to commit wire fraud, money laundering, and securities fraud. He was also ordered to pay $11,467,573.15 in restitution to more than 700 victims, and to forfeit more than $9.6 million in assets, which are traceable to the proceeds obtained from the offenses. As part of Merrick’s sentence, the court also entered a money judgment in the amount of $15 million.
This case was investigated by the United States Secret Service. It was prosecuted by Assistant United States Attorneys Roger B. Handberg, I. Randall Gold and Nicole Andrejko.