Former Las Vegas Resident Pleads Guilty to Loan Fraud Scheme
Las Vegas, Nev. – Prior to completion of a jury trial, Casey Luczak pleaded guilty today to 23 counts of wire fraud and one count of making a false statement for operating an "advance fee" loan fraud scheme, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
From 2002 to 2005, Luczak, 71, a former resident of Las Vegas, but currently a resident of Atlanta, Georgia, defrauded more than 50 victims through his Nevada-based business entities The Interchange Group ("TIG") and Gemini Capital Fund ("Gemini"). He was indicted by the federal grand jury in Las Vegas in May 2008. A jury trial began in the case on January 11, 2010.
On TIG's website and in various marketing materials, Luczak falsely promised victims that in exchange for substantial advanced fees, TIG and Gemini would provide funding for business loans or collateral which could be used to obtain traditional bank loans. Luczak fabricated or grossly exaggerated TIG's and Gemini's staff and experience, financial portfolio, and history of investing in and funding companies seeking business loans. Luczak provided victims phony references, fabricated "certificates of achievement" with the Better Business Bureau, listed staff and domestic and foreign offices that did not exist, and falsely represented that TIG and Gemini owned and managed funds available for investment in excess of $180 million.
Relying on the false representations, individuals entered into contracts with Luczak and wired or mailed to him over $1 million in fees for the purpose of securing business loans, direct equity investments, and collateral. Rather than using the fees to provide funding or genuine collateral as promised, Luczak used the monies to purchase luxury automobiles, including a Ferrari, Dodge Viper, and a Corvette, and for other items, such as a Steinway piano, personal residences, personal travel, fine dining and entertainment, and extensive gambling. When victims failed to receive loans or the collateral promised, Luczak refused to refund their money, fraudulently claiming that victims were not entitled to refunds, or stringing victims along with false promises that their loans were forthcoming when he knew that the loans or collateral would never materialize. When victims eventually complained to the Better Business Bureau or law enforcement, Luczak attempted to intimidate them into retracting complaints by threatening to place their loan projects "on hold" and using other coercive tactics. As a result of being financially victimized by Luczak, many victims were forced into personal and business bankruptcy, while other victims were unable to implement their business plans because their only available loan funds had been exhausted by Luczak.
On April 26, 2005, an FBI Special Agent investigating complaints of the victims questioned Luczak regarding his business practices with TIG and Gemini Capital. Luczak falsely told the Special Agent that he had used the fees he received from victims to help find loans, for collateral, to pay project directors, and to conduct due diligence examinations of victims' companies when he knew that he had not used their money for such purposes but had in fact converted the vast majority of victims' fees to his own personal use in order to support a luxury lifestyle.
Luczak is scheduled for sentencing on April 19, 2010, before U.S. District Judge Philip M. Pro. He faces up to 20 years in prison and a $250,000 fine on each count of wire fraud, and up to 5 years in prison and a $250,000 fine on the false statement. Additionally, Luczak is subject to an order of forfeiture for loss to victims of approximately $2 million. Luczak is currently released on home confinement pending sentencing.
The case was investigated by the Federal Bureau of Investigation and prosecuted by Assistant United States Attorneys Christina M. Brown and Roger Yang.