Three Charged in Connection with Multi-million Dollar Fraud Schemes
Three men were charged today in a criminal complaint for their participation in $15 million fraudulent investment schemes between December 2008 and April 2012. Defendants’ initial appearances are scheduled this afternoon before United States Magistrate Judge Marilyn D. Go at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.
The three defendants are Peter Liounis, who is charged with wire fraud, Ruslan Rapoport, who is charged with conspiracy to commit wire fraud and money laundering, and Roman Tsimerman, who is charged with money laundering.1
The charges were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; James T. Hayes, Jr., Special Agent-in-Charge, U.S. Department of Homeland Security, Homeland Security Investigations (HSI), New York; Ronald J. Verrochio, Postal Inspector in Charge, U.S. Postal Inspection Service, New York Division; and Brian G. Parr, Special Agent-in-Charge, United States Secret Service.
According to the complaint, between approximately December 2008 and April 2012, Liounis and his co-conspirators executed three successive fraudulent investment schemes through which they obtained over $15 million from investors based on false promises about investment opportunities.
A. The Rockford Group Scheme
From approximately December 2008 to November 2009, Liounis and his co-conspirators allegedly executed a fraudulent investment scheme through a company called the Rockford Group. The Rockford Group marketed itself as a “leading private equity firm,” claimed to invest in plaintiffs’ rights to future recoveries in personal injury and other lawsuits, and promised a 15% return. The Rockford Group, however, never invested in any lawsuits. Instead, nearly all of the investor funds were wired to bank accounts overseas. Approximately 200 investors in the U.S. and Canada lost approximately $11 million as a result of this scheme.
B. The General Motors IPO Scheme
The complaint alleges that in September 2010, an individual who had been solicited to invest in the Rockford Group by one of its representatives, “James Weston,” began receiving calls from someone who sounded like “Weston,” but was now identifying himself as “Andrew Black from UBS.” “Black” solicited multiple investors to invest in an initial public offering (IPO) of General Motors stock. Federal agents determined that there was no “Andrew Black” at UBS, and were able to halt this scheme in its early stages and return most of the investors’ funds.
C. The Grayson Hewitt Scheme
In about March 2011, investors were allegedly contacted by a person who sounded like “Andrew Black” and “James Weston,” but was now identifying himself as “Mark Anderson from Grayson Hewitt.” As with the Rockford Group scheme, “Anderson” told investors that Grayson Hewitt purchased plaintiffs’ rights to future recoveries in personal injury and other lawsuits, and promised a 15% return. As alleged in the complaint, federal agents have identified Liounis as the person who solicited the Rockford Group, General Motors IPO and Grayson Hewitt investors, using the names “James Weston,” “Andrew Black” and “Mark Anderson.”
In a series of calls captured by a court-ordered wiretap, the son of an investor sought the return of his father’s money so that the son could place his father, who had suffered a heart attack, into assisted living. Although the father had some $23,000 left in his Grayson Hewitt account, Liounis allegedly falsely told the son that his father had been depleting the account and had only $3,000 remaining. Liounis then sent the father and son a “get well fruit basket.” In another call, a Grayson Hewitt investor expressed skepticism about the company, noting “I see this as a Bernie Madoff deal....” According to the complaint, Liounis responded, “this is no way, no how, a Bernie Madoff...believe that!...You gotta understand, the amount of money we handle here, uh, we’d go away for a hell of a lot longer than Bernie did.”
The defendants and others allegedly used investor funds to purchase gold, meals, clothing and other consumer items. As charged in the complaint, Rapoport and Tsimerman assisted in the transportation of gold that was purchased by Grayson Hewitt. One such gold shipment cost Grayson Hewitt $100,000. Based on bank and financial records, it appears that the Grayson Hewitt scheme resulted in approximately $5 million of losses to investors.
“As set forth in the complaint, the defendant Liounis was the chameleon of con men, assuming new identities as needed to exploit his victims over and over again. The defendants went on to steal the savings of hard working individuals, and to attempt to pacify them with lies,” stated United States Attorney Lynch. “We will vigorously prosecute individuals who seek to profit through this type of fraud.” Ms. Lynch extended her appreciation to the Federal Bureau of Investigation and the Queens County District Attorney’s Office for their assistance in the investigation.
“As charged in the complaint, this organization’s façade included the use of phony bank accounts, brochures, statements and solicitors – all part of the alleged schemes set up to steal millions of dollars from innocent investors,” said HSI Special Agent-in-Charge Hayes. “HSI will continue to seek out money laundering organizations who look to gain from illegal activity.”
Postal Inspector-in-Charge Verrochio stated, “Postal Inspectors will vigorously pursue and prosecute those individuals who prey upon and defraud investors in the furtherance of criminal activity through the US Mail.”
Secret Service Special Agent-in-Charge Parr stated, “Financial fraud schemes such as those charged in the complaint ultimately generate public distrust and lack of confidence in the nation’s financial systems. The success of this investigation is a direct result of the excellent collaboration between the Secret Service and our federal law enforcement partners.”
If convicted, Liounis and Rapoport each face a maximum sentence of 20 years and Tsimerman faces a maximum sentence of 10 years.
The government’s case is being prosecuted by Assistant United States Attorneys Daniel Spector, Pamela Chen and Scott Landau.
This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The Task Force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The Task Force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
The Department of Justice believes that it is important to keep victims/witnesses of federal crime informed of court proceedings and what services may be available to assist you.