June 10, 2003

OFFICE OF THE UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF CALIFORNIA
San Diego, California

United States Attorney
Carol C. Lam

For Immediate Release

NEWS RELEASE SUMMARY

United States Attorney Carol C. Lam announced today the arrests of Luisa Rubi, Genaro Aquino, and Edmundo Rubi and the unsealing of a multi-count indictment charging them with offenses arising from the operation of Knights Express, Ltd. and Djmler Enterprises, Inc. The twenty-two count indictment includes charges of conspiracy, money laundering, mail fraud, wire fraud, passport fraud, and filing false income tax returns.

According to the indictment, Luisa Rubi, Aquino, and Edmundo Rubi utilized the businesses to operate a scheme to defraud investors out of more than $25 million. Potential investors were told that their money would be invested in a secret international trading program, in which federal reserve notes (U.S. dollars) were purchased and sold at discounted rates. According to Assistant U.S. Attorney Jason Forge, who is prosecuting the case, no such investment program exists. The indictment alleges that investor funds were actually used to facilitate the scheme by using money received from new investors to pay the periodic returns to earlier investors, commonly known as a "prime bank scheme." It is also alleged that the funds were used for personal purchases, including several homes and a vacant lot. Investors had been promised rates of return of two to 9 percent per month on their money.

On September 19, 2001, agents of the Internal Revenue Service and Department of Homeland Security executed search warrants on the Knights Express business offices. At that time, a Court-appointed receiver was assigned to distribute the remaining funds to the victim-investors. Thus far, the receiver has distributed to victim-investors $1.5 million.

This case is the product of a joint investigation by the Internal Revenue Service - Criminal Investigation, and the Bureau of Immigration and Customs Enforcement, Department of Homeland Security.

DEFENDANTS

Luisa Rubi
Genaro Aquino
Edmundo Rubi

SUMMARY OF CHARGES

Title 18, U.S.C., Sec. 371 - Conspiracy to Commit Mail Fraud and Wire Fraud
Maximum penalty per count: five years; fine of $250,000

Title 18, U.S.C., Sec. 1341 - Mail Fraud
Maximum penalty per count: five years; fine of $250,000

Title 18, U.S.C., Sec. 1343 - Wire Fraud
Maximum penalty per count: five years; fine of $250,000

Title 18, U.S.C., Sec. 1956(h) - Conspiracy to Commit Money Laundering
Maximum penalty per count: twenty years; fine of $500,000

Title 26, U.S.C., Sec. 7206(1) - False Tax Return
Maximum penalty per count: three years; fine of $100,000

Title 18, U.S.C. Sec. 1542 - Passport Fraud
Maximum penalty per count: ten years; fine of $250,000

AGENCIES

Internal Revenue Service - Criminal Investigation
Bureau of Immigration and Customs Enforcement, Department of Homeland Security

An indictment itself is not evidence that the defendants committed the crimes charged. The defendants are presumed innocent until the Government meets its burden in court of proving guilt beyond a reasonable doubt.