FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC at 410-209-4885
DECEMBER 16, 2005
FOR IMMEDIATE RELEASE
LOCAL MAN SENTENCED FOR TAX CHARGES RELATING
TO UNREPORTED PROFITS FROM PONZI SCHEME
BALTIMORE - United States Attorney for the District of Maryland Rod J. Rosenstein announces today that U.S. District Judge Catherine C. Blake sentenced Robert B. Sando, age 53, of Catonsville, to 5 months in prison and an additional 5 months of home detention on electronic home monitoring, followed by 2 years of supervised release related to the filing a false tax return. Judge Blake also ordered Sando to pay $266,596 in restitution. Sando was a regional marketer of promissory notes for a nationwide business called Cash 4 Titles until its collapse in October, 1999.
According to the statement of facts presented at his guilty plea on July 3, 2003, operating out of dozens of storefronts especially in Southeastern states, Cash 4 Titles provided high-interest payday loans to borrowers who turned over their car titles as collateral. The principals of cash 4 Titles then marketed promissory notes to investors purportedly to raise capital to fund the loans. Interest was paid to the investors in the notes by monthly deposits into bank accounts in the Bahamas that could be accessed in the United States through credit and debit cards. Marketers of the notes, including Sando, earned commissions that were similarly paid into bank accounts in the Bahamas.
On October 15, 1999, the United States Securities and Exchange Commission brought the scheme to a halt by obtaining a temporary restraining order in federal court in Chicago against 26 defendants, including Charles R. Homa and Michael Gause, the principals of Cash 4 Titles. According to the SEC complaint, Homa and Gause stood atop a multi-layered marketing scheme that raised as much as $300 million from 1997 to 1999 from investors who were told that their money would fund Cash 4 Titles loans. In fact, very little of the money went to that purpose, according to the complaint, and the business was a Ponzi scheme that transferred money from new investors to overseas accounts and used it to pay interest to existing investors and commissions to marketers of the notes. After the scheme collapsed in October, 1999, the court in Chicago appointed a Receiver to assemble the remaining assets of the scheme and make partial compensation to thousands of investors who lost money. Homa, Gause and other high-level marketers subsequently pled guilty to fraud and money laundering charges in federal court in New York.
Sando was not named as a defendant in the SEC case and is not charged as a knowing participant in a fraudulent scheme. In his plea, Sando agreed that he failed to report to the IRS the commission income he earned for selling Cash 4 Titles promissory notes, primarily to Maryland investors. According to the plea agreement, Sando reported a taxable income of $30,772 for 1998, while his actual taxable income was $644,410. The total tax loss for 1997 and 1998 was $266,596, and Sando agreed to pay restitution in that amount as part of his plea.
"We view schemes as organized tax evasion and it is a top priority for us to stop promoters of schemes" said Rick A. Raven, Special Agent in Charge, IRS Criminal Investigation.
The case was investigated by special agents of the Internal Revenue Service - Criminal Investigation and the Securities Division of the Office of the Maryland Attorney General. The case is being prosecuted by Assistant United States Attorney Robert R. Harding.
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