SAMMAMISH PONZI SCHEMER SENTENCED TO THREE YEARS IN PRISON FOR
$4 MILLION FRAUD
Former Boeing Employee Preyed on Long-time Friends, Neighbors, and Classmates
LORENZO V. MOLINA, JR., 49, of Sammamish, Washington, was sentenced today in U.S. District Court in Seattle to three years in prison, three years of supervised release, and $2.2 million in restitution for mail fraud and making a false statement. MOLINA defrauded his friends, neighbors, and even elementary school classmates claiming he was in the business of purchasing, rehabilitating, and reselling used aircraft parts. The company was a sham. At sentencing, U.S. District Judge John C. Coughenour said the sentence reflected the seriousness of the crime.
According to records in the case, between October 2006, and August 2009, MOLINA took in approximately $3,972,431 from investors who thought he was operating a company called “Commercial Aviation Services.” The company allegedly purchased used aircraft equipment, such as emergency slides, refurbished the equipment, and then sold them to airlines at a profit. MOLINA represented that his prior employment with Boeing provided him expertise in this area. In fact, neither the company nor MOLINA purchased, rehabilitated, and resold any such equipment. As in a typical Ponzi scheme, MOLINA used some of the money from later investors to pay off prior investors – inducing them to believe the company was a good investment. Some of the early investors were encouraged to “roll over” their investment, leaving the money with MOLINA for even greater returns.
When MOLINA ran out of money to pay investors in March 2008, he told investors that payments from airlines were being blocked by government agencies because of concern about the source of funds. MOLINA repeated these claims to officials with the Treasury Department’s Office of Export Enforcement and Department of Homeland Security in February 2009. The statements were false – there were no government blocks on any of his bank accounts. The money had simply been spent on a Steinway & Sons grand piano, tuition for private schools for MOLINA’s children, horses, and real estate for himself and his extended family, including homes in Issaquah, Maple Valley, Fall City, and Ft. Mohave, Arizona.
Asking for a sentence at the top of the guidelines range, Assistant United States Attorney Aravind Swaminathan wrote to the court that the victims in this case have been ruined financially, some declaring bankruptcy or shuttering the business they founded. “Molina deceived his victims out of an enormous amount of money – $2,204,153 – by manipulating their trust and their friendship. Based on Molina’s lies, the victims gave Molina their hard-earned paychecks, their life savings, their retirement accounts, and even their children’s college fund,” Mr. Swaminathan wrote in his sentencing memo.
The case was investigated by the United States Postal Inspection Service (USPIS). The case is being prosecuted by Assistant United States Attorney Aravind Swaminathan and Andrew Friedman.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.