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FOR IMMEDIATE RELEASE |
Sept. 11 , 2009
FOUNDERS OF PBS GLOBAL PLEAD GUILTY IN FAX FRAUD CASE
WICHITA, KAN. – Two of the founders of PBS Global, Inc., have pleaded guilty to charges of defrauding the company’s customers, U.S. Attorney Lanny Welch said today.
John Persaud, 47, Boca Raton, Fla., and Richard Hagan, 48, Melbourne, Fla., each pleaded guilty to one count of conspiracy to commit wire fraud and one count of money laundering.
In their pleas, the two men admitted that in the spring of 2003 they formed Prudential Business Services, Inc., which later became known as PBS Global, Inc., with Hagan serving as chief executive officer and Persaud working as director of sales. Advertising via notices faxed to small businesses across the nation, the company offered to assist owners in finding buyers for their small businesses.
Persaud recruited and trained sales force members and provided them with sales materials that contained false and fraudulent claims. This included false claims that PBS had a successful track record over a period of years, that PBS made money only when a customer’s business was successfully sold, and that PBS sales force members did not depend on commissions for income. From July 8, 2003, through June 2004, PBS did not collect any money from successful sales of clients’ businesses. During that time, though, the company collected more than $6.5 million from clients to pay for third party evaluations of their businesses and paid about $171,000 to the companies that provided the evaluations.
From July 8, 2003, through December 31, 2005, PBS paid a total of more than $4 million to Persaud. Hagan was paid more than $1 million during 2003 through 2005.
Sentencing is set for Nov. 20, 2009. Prosecutors are recommending 90 months in federal prison for Persaud, and 68 months for Hagan.
Other defendants include:
Andrew Wang, who is set for sentencing Sept. 19, 2009
Shaun Smoker, who is set for sentencing Nov. 4, 2009.
Brandon Cook, who is set for sentencing Nov. 9, 2009.
Brian Renneisen, who is set for sentencing Nov. 16, 2009.
Marvin R. Hicks, who is set for sentencing Nov. 20, 2009
Welch commended the U.S. Secret Service, Internal Revenue Service - Criminal Investigation, the Wichita Police Department and Assistant U.S. Attorney Alan Metzger for their work on the case.
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