FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
AUGUST 9, 2007
FOR IMMEDIATE RELEASE
Alan Fabian Indicted in $32 Million Computer Equipment Leasing Scheme
Indictment Seeks Forfeiture of a Yacht, Properties in North Carolina and Maryland,
Cash, Vehicles and Fabian’s Interest in Several Companies
Baltimore, Maryland - A grand jury indicted Alan Brian Fabian, age 43, of Cockeysville, Maryland, for mail fraud, money laundering, bankruptcy fraud, perjury and obstruction of justice arising out of a scheme to defraud an equipment leasing company, financial institutions and a government consulting company of $32 million, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
United States Attorney Rod J. Rosenstein said, "The indictment alleges that Mr. Fabian defrauded the victims of $32 million, took much of the criminal proceeds for his personal use and then lied about the scheme in bankruptcy court. Fraud by corporate executives jeopardizes public confidence in our economy."
Special Agent in Charge William D. Chase, of the Baltimore Division of the Federal Bureau of Investigation, said, “This alleged multi-million dollar scheme is an egregious example of an individual who exploited legitimate business for his own selfish gain. The FBI remains committed to fighting white collar crime because of the serious damage it does to our nation’s economy."
Special Agent In Charge, Francis L. Turner, IRS - Criminal Investigation stated, "Money laundering is not a victimless crime. Not only are innocent people "duped" by various schemes, but the underground, untaxed economy harms the entire nation's economic strength."
Mail Fraud Scheme and Money Laundering
According to the 23-count indictment, from March 2001 to July 2004, Fabian, a certified public accountant, caused Strategic Partners International LLC and later, Strategic Partners International, Inc., companies that he formed (collectively, SPI), to enter into sale-leaseback transactions to purportedly purchase $32 million in computer hardware and software, when in fact SPI either never purchased such equipment or purchased substantially less expensive equipment.
Fabian is alleged to have made numerous misrepresentations to the leasing company and funding sources to induce them to enter into these transactions:
~ provided false bills of sale, equipment addendums, and other documents purporting to reflect that SPI had purchased computer equipment, when in fact SPI had not purchased such computer equipment, and thus did not have that equipment to sell and lease back. Fabian also provided misleading documents purporting to reflect that SPI had purchased certain computer hardware at specific prices, when in fact SPI had purchased different and substantially less expensive items;
~ falsely represented that SPI, Inc. was a subsidiary of his employer company, when in fact his employer had no knowledge of, or affiliation with, SPI, Inc.; and
~ provided false documents purporting to reflect that SPI had purchased computer software from companies Special Properties and SmartSoftware, when in fact SPI had made no such purchases.
Fabian also executed corporate guaranties on behalf of his employer purporting to obligate his employer to pay any debt owed by SPI from the sale-leaseback transactions.
As a result of this scheme, the indictment alleges that Fabian caused his employer to make approximately $800,000 in rent payments to the leasing company and funding sources on purported leases entered into by SPI. Fabian diverted substantial amounts of cash provided to SPI by the leasing company for his personal benefit, including at least $500,000 to purchase real estate in North Carolina, $600,000 to pay for private jet travel and $3.9 million to form and operate the Centre for Management and Technology (CMAT), a not-for-profit entity located in Baltimore.
Knowing that he had purported to obligate his employer to pay any debt owed on the leases, Fabian defaulted on 11 leases in July 2004.
Bankruptcy Fraud, Perjury and Obstruction of Justice
The indictment also alleges that on August 31, 2004, two of the funding sources filed a petition forcing SPI, Inc. involuntarily into bankruptcy. From June 2004 to at least January 2007, Fabian engaged in a scheme to defraud the bankruptcy court and creditors of SPI in order to keep the proceeds of his mail fraud scheme out of reach of SPI’s creditors by creating false documents and giving false testimony.
Fabian is alleged to have perjured himself in the course of two depositions in the SPI, Inc. bankruptcy case. In both instances, Fabian allegedly testified falsely about SmartSoftware, claiming on one occasion not to know the identity of the principals of SmartSoftware, when in fact Fabian knew he was the sole principal of SmartSoftware, and on the other occasion, claiming that SmartSoftware was a Netherlands company that had sent SPI invoices by e-mail. In fact, it is alleged that Fabian had created the invoices himself on his own computer.
Finally, Fabian is charged with obstructing justice by: falsely testifying before the bankruptcy court in December, 2006 about transfers of funds he made from SPI to purchase real estate in North Carolina; filing false financial statements with the bankruptcy court on three occasions in 2004 and 2005; and influencing a business associate to provide false information to a forensic accountant retained by the bankruptcy trustee.
The indictment seeks forfeiture of $32 million in substitute assets, including eight properties in North Carolina and a property in Hunt Valley, Maryland; cash; a Silverton yacht; three vehicles; and Fabian’s interest in several companies.
Fabian faces a maximum sentence of 20 years in prison for each of the nine counts of mail fraud; 10 years in prison for each of the nine counts of money laundering and one count of obstruction of justice; and five years in prison for each of the two counts of bankruptcy fraud and two counts of perjury. Fabian is scheduled to have his initial appearance in federal court in Baltimore at 3:00 p.m. today.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Tonya Kelly Kowitz and Jonathan Biran, who are prosecuting the case.