United States v. Cengiz Jan Comu, et al.

PENDING CRIMINAL DIVISION CASES

EarthWater cases

United States v. Cengiz Jan Comu, et al.,
Court Docket No.: 3:19-cr-00112-K (N.D. Texas)

United States v. Beth Ellen DeGroot
Court Docket No.: 3:19-cr-00521 (N.D. Texas)

United States v. Donald Andrew Rothman
Court Docket No.: 3:19-cr-00437 (N.D. Texas)

United States v. Daniel Thomas Broyles
Court Docket No. 3:22-cr-00150-MOC-DCK-1 (W.D. North Carolina)

Court Assigned: These cases, except where noted, are assigned to U.S. District Judge Ed Kinkeade, U.S. District Court for the Northern District of Texas, U.S. Courthouse, 1100 Commerce Street, Room 1625, Dallas, TX 75242. Unless otherwise noted in an update below, all court events will take place at this location.

On March 1, 2023 defendant Buddy Barnes was sentenced to 70 months of incarceration, $10,168,575.21 in restitution, 2 years of supervised release and $ 2,200.00 of special assessment.

On March 1, 2023 defendant Joseph Lucien Duplain was sentenced to 4 years’ probation $217,420.00 in restitution.

On January 24, 2023 Donald Andrew Rothman was sentenced to 40 months in prison, 2 years of supervised release and $12.4 million in restitution.

On January 18, 2023, Cengis Jan Comu was sentenced to 120 months in prison, 3 years of supervised release and $12.4 million in restitution.

On January 18, 2023 for John Mervyn Price was sentenced to 72 Months, 3 years of supervised release and $12.4 million in restitution.

On January 11, 2023 defendant Richard Lawrence Green was sentenced to 6 years in prison, 3 years of supervised release and $12.4 million in restitution

On December 14, 2022, defendant Suzanne Aileen Gagnier was sentenced to 24 months in prison, 1 year of supervised release and $643,500 in restitution.

On November 30, 2022, defendant Beth Ellen DeGroot was sentenced to 4 years of probation with conditions and $15,459.38 in restitution.

On November 9, 2022, defendant Richard Laurence Kadish was sentenced to 72 months in prison, 3 years of supervised release and $12.4 million in restitution.

The table below, last updated on February 2, 2023, provides details of the upcoming sentencing events for various defendants in the case:

Please note that due to the on-going COVID-19 pandemic, courthouses may have different rules regarding in-person attendance. Please check the court’s website or contact us at Victimassistance.fraud@usdoj.gov if you are planning to attend.

Previous Updates – 

On September 7, 2022 defendants Filippo and Duplain pled guilty.

On June 30, 2022 defendant Suzanne Aileen Gagnier entered a plea of guilty.

On June 24, 2022 defendant Broyles entered a plea of guilty at the U.S. Courthouse, 401 West Trade Street, Charlotte, NC 28202.

On June 21, 2022, defendant Daniel Thomas Broyles case was transferred from the U.S. District Court for the Northern District of Texas to the U.S. District Court for the Western District of North Carolina, case U.S. v. Daniel Broyles, 3:22-cr-00150-MOC-DCK-1 (W.D.N.C.), before District Judge Max O. Cogburn, Jr. 

Defendant Joe Edward Duchinsky entered a guilty plea on June 14, 2022.

Defendant Harley E. Barnes, III entered a guilty plea on June 7, 2022.

Defendant Beth Ellen DeGroot entered a guilty plea on May 17, 2022.  

Defendant Joseph Lucien Duplain entered an agreement to plead guilty on May 5, 2022. 

On June 11, 2020, defendant Price pleaded guilty to one count of conspiracy to commit mail and wire fraud, ten counts of mail fraud, ten counts of wire fraud and one count of money laundering.

On March 10, 2020, defendant Comu pleaded guilty to one count of conspiracy to commit mail and wire fraud, ten counts of mail fraud, ten counts of wire fraud and two counts of money laundering.

On January 3, 2020, defendant Duplain pleaded not guilty to counts one through twenty-one of the superseding indictment.

On November 21, 2019, defendants Duchinsky, Filippo, and Gagnier pleaded not guilty to counts one through twenty-one of the superseding indictment. Defendant Duchinsky was arrested and appeared on November 6, 2019, in Santa Ana, California before U.S. Magistrate Judge Autumn D. Spaeth. Defendant Gagnier was arrested and appeared on November 7, 2019, in Los Angeles, California before U.S. Magistrate Judge Frederick F. Mumm. Defendant Filippo was arrested and appeared Thursday, November 7, 2019, in Oklahoma City, Oklahoma before U.S. Magistrate Judge Gary M. Purcell.

On November 19, 2019, defendant Green pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of mail fraud.

On October 31, 2019, defendant Donald Andrew Rothman pled guilty in a separate but related case (19cr437; N.D. Texas).

On September 10, 2019, defendant Kadish pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of mail fraud.

On May 9, 2019, defendant Barnes pleaded not guilty to counts one through twenty-one of the indictment.

On May 6, 2019, defendants Price and Barnes were arrested and appeared before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas. 

Defendant Comu was arrested and appeared on Wednesday, May 8, 2019, also before Judge Toliver. 

Defendant Kadish was arrested and appeared Wednesday, May 8, 2019, in Miami before U.S. Magistrate Judge Jacqueline Becerra of the Southern District of Florida.

Defendant Green was arrested and appeared Wednesday, May 8, 2019, in Fort Lauderdale before U.S. Magistrate Judge Lurana S. Snow of the Southern District of Florida. 

Defendant Duplain was arrested and appeared on December 6, 2019, in Riverside, California before U.S. Magistrate Judge Sheri Pym.

Broyles made his initial appearance in federal court in Charlotte, North Carolina, on March 2, 2022 in another case after being extradited from Mexico to face charges related to his involvement in two high-yield investment fraud schemes.

Criminal Charges: Cengiz Jan “CJ” Comu, 58, of Dallas, Texas; John Mervyn Price, 63, also of Dallas;   Harley E. “Buddy” Barnes, III, 60, of Plano, Texas; Richard Laurence Kadish, 57, of Miami, Florida; Richard Lawrence Green, 69, also of Miami; and Daniel Thomas Broyles Sr., 61, formerly of Malibu, California, were charged in an indictment returned in the Northern District of Texas with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and 10 counts of wire fraud.  The indictment was unsealed on May 8, 2019. On October 9, 2019, the court unsealed a separate indictment – which was followed by a superseding indictment filed on March 4, 2020 – charging Beth Ellen Degroot and Barnes with one count of wire fraud and four counts of obstruction of an official proceeding.

The indictment alleges that, beginning in 2013, Comu, Price, Barnes, Kadish, Green and Broyles conspired to sell stock in EarthWater, a United Kingdom company headquartered in Dallas County, Texas.  EarthWater manufactured and sold bottled water that it claimed was infused with special minerals mined from an 80-million-year-old deposit hidden in a secret location. 

According to the indictment, Comu, who is EarthWater’s founder, chairman and chief executive officer, falsely represented to victim investors that he was a successful Wall Street veteran with decades of experience and did not disclose to investors that, among other things, he was permanently barred from selling unregistered securities as a result of actions filed by state and federal securities regulators.

The indictment further alleges that, to induce victims to purchase EarthWater stock, Comu, Price, Barnes, Kadish, Green, Broyles, and others made numerous false and misleading representations, including that victim investors only had a brief opportunity to purchase EarthWater stock for anywhere from $.10 to $.50 per share in an unregistered offering before EarthWater launched an initial public offering (IPO) or was acquired by a large well-known company and EarthWater’s stock price would increase anywhere from 10- to 50- times the purchase price.  In reality, EarthWater allegedly never initiated an IPO, or a merger or acquisition.    

The indictment also alleges that defendants falsely represented to victim investors that EarthWater would use 90 percent of invested funds to grow its business and expand operations, and that any fees paid to broker-dealers with respect to the sale of EarthWater stock would not exceed 10 percent of the purchase price of the shares.  In reality, Comu, Price and Barnes allegedly agreed to split victim investors’ funds 50-50 with Kadish, Green, Broyles and other individuals who sold EarthWater stock.  As a result, nearly half of all of the money victims invested in EarthWater allegedly went directly into the pockets of the individuals who sold them the stock.

In addition, according to the indictment, the defendants also falsely represented to victim investors that Comu, Price and Barnes did not receive salary from EarthWater in 2014, 2015 or 2016.  In reality, Comu, Price and Barnes allegedly used EarthWater’s investment account as a personal piggybank, using victim investor funds for their own personal benefit and transferring victim investor funds to bank accounts controlled by them for their own personal use.  

For more information about the charges, please see below:

Press Release
EarthWater Indictment
DeGroot Superseding Indictment

Victim Impact Statement:  If you would like to submit a Victim Impact Statement you may do so by mailing the Victim Impact Statement below to: Victim Witness Unit, U.S. Department of Justice, Criminal Division, Fraud Section, 10th & Constitution Avenue, NW, Bond Building, Room 4416, Washington, DC 20530. You also may submit the Victim Impact Statement via email at Victimassistance.fraud@usdoj.gov or by fax at: (202) 514-3708.

Victim Impact Statement (PDF)

The information on this website will be updated as new developments arise in the case. If you have any questions, please call the Victim Assistance Line toll-free at (888) 549-3945 or email us at VictimAssistance.fraud@usdoj.gov.

Presumption of Innocence: It is important to keep in mind that an Indictment contains allegations only, and that defendants are presumed innocent until proven guilty.  That presumption requires both the court and our office to take certain steps to ensure that justice is served.

Crime Victims’ Rights Act and Right to Retain Counsel: The Crime Victims’ Rights Act (18 U.S.C. § 3771) applies only to victims of the counts charged in federal court, and thus individuals may not be able to exercise all of these rights if the crime of which the individual is a victim was not charged. Section 377I(c)(2) of this Act requires that we advise you that you have the right to retain counsel. Although the statute specifically sets forth your right to seek advice of an attorney with regard to your rights under the statute, there is no requirement that you retain counsel. The Government may not recommend any specific counsel, nor can the government (or the court) pay for counsel to represent you. Government attorneys represent the United States.

If you elect to obtain counsel to represent your interests, please have your attorney notify this office in writing at: U.S. Department of Justice, Criminal Division, Fraud Section, 10th & Constitution Avenue, NW, Bond Building, 4th Floor, Washington, DC 20530, Attention: Victim Witness Unit; fax: (202) 514-3708; or email: VictimAssistance.fraud@usdoj.gov. If you elect not to retain counsel to represent your interests, you do not need to do anything.

Plea Agreements: Please be aware that many criminal cases are resolved by plea agreement between the Department of Justice and the defendant. If you want to inform the prosecutor of your views regarding the plea agreement, or any other aspect of the case, please call the Victim Assistance Line toll-free at (888) 549-3945 or email us at VictimAssistance.fraud@usdoj.gov, and we will put you in touch with the prosecutor.