Two Charged With Conspiracy, Fraud and Money Laundering
PITTSBURGH, Pa. - A former resident of Pittsburgh, Pa., and a current resident of Apollo, Pa., have been indicted by a federal grand jury in Pittsburgh on charges of conspiracy, wire fraud, mail fraud, money laundering, and structuring financial transactions, United States Attorney David J. Hickton announced today.
The 25-count superseding indictment named Frank Guzik, Jr., 43, and Bonnie Gardner, 54. Guzik has been a fugitive since 2009.
According to the superseding indictment, Guzik and Garner participated in a conspiracy in which they solicited investments into East Haven Development Company and related entities, which were involved in the purchase and rehabilitation of real estate. The superseding indictment alleges that Guzik and Gardner made a series of misrepresentations to investors to induce them to invest and to not to withdraw their investments, and they provided fraudulent documents to the investors for the same purpose. The superseding indictment also alleges that Guzik and Gardner arranged for the purchase of a number of properties to straw purchasers to make it falsely appear to the investors that East Haven was profitable and that their investments were secure. Lenders financed these purchases based on a series of misrepresentations to the lenders about the financial condition of the borrowers and about down payments that the purchasers were purportedly making in connection with the purchase of the properties, but that were in fact not made by the purchasers.
The superseding indictment also alleges that Guzik used some of the investors' funds for his personal benefit contrary to the representations to the investors, and that he laundered some of the proceeds of the fraud. In addition, the superseding indictment alleges that Guzik structured financial transactions through a series of cash withdrawals of slightly less than $10,000 to avoid the reporting that would be triggered had he withdrawn in excess of $10,000.
The law provides for a maximum total sentence of 390 years in prison, a fine of $6,750,000, or both for Guzik, and 300 years in prison, a fine of $3,750,000 or both for Gardner. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendants.
Assistant United States Attorney Brendan T. Conway is prosecuting this case on behalf of the government.
The Mortgage Fraud Task Force conducted the investigation leading to the superseding indictment in this case. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the Federal Bureau of Investigation; the Internal Revenue Service - Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; the United States Postal Inspection Service; and the United States Secret Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office.
An indictment is an accusation. A defendant is presumed innocent unless and until proven guilty.
Protect yourself from fraud, and report suspected cases of financial fraud to local law enforcement.