Former President of MGM Grand Pleads Guilty to Violating the Bank Secrecy Act for Allowing Man Involved in Criminal Conduct to Gamble
RIVERSIDE, California – Three people, including a Coachella Valley man who allegedly posed as a war hero and a successful attorney, have been charged by a federal grand jury for their roles in a variety of fraudulent schemes that victimized at least 20 investors and caused losses of more than $2 million.
The case was announced today by United States Attorney Eileen M. Decker; David Bowdich, the Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Norm Embry, Special Agent in Charge of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
The three defendants were charged in a superseding indictment filed on July 8, and one of the defendants was arrested this week. The 24-count indictment alleges that they lied to investors in a series of schemes, and then used investor money for personal expenses rather than investing the funds as promised. The defendants named in the indictment are:
• Jerome Whittington, 65, of La Quinta, California, who was initially charged in June 2014 in this case, and who is charged in a separate case with posing as a former federal prosecutor in a case involving a former DEA agent (see: http://www.justice.gov/usao-cdca/pr/former-dea-agent-arrested-lax-fraud-and-passport-charges);
• Patricia Torres Zavala, 42, of Benicia, California, who was arrested on Tuesday in Northern California, subsequently released on bond, and ordered to appear for an arraignment in federal court in Southern California on August 4; and
• Kathleen Moore, 68, of Olympia, Washington, who has agreed to surrender to federal authorities on August 5.
The superseding indictment alleges that Whittington and his two codefendants made false statements and misrepresentations to induce victims to invest money in various business ventures and real estate purchases. Among other misrepresentations detailed in the indictment, Whittington falsely claimed to be a wealthy real estate investor, a Purple Heart recipient and an attorney to gain the admiration of victims and add legitimacy to the scheme. In one instance, Whittington told a victim he owned a private jet and movie company as he solicited an investment in a company known as “Sesma.” Whittington claimed Sesma had developed an Internet browser that was being used in China, and while Whittington told the victim his investment would be used to purchase stock in Sesma, he instead used the money for personal expenses.
In another scheme, Zavala, a former Bank of America employee, purported to be a short-sales expert working with Whittington in order to help victims obtain real estate properties at very low rates, according to the indictment. Zavala, who allegedly used her position at the bank to coerce victims to send money, was paid by Whittington from the proceeds of the fraud.
Moore purported to be Whittington’s accountant and, in that capacity, handled all finances and received money from various victims. The indictment alleges that Moore promised investors returns of up to $25 for every $2 invested in Sesma.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until proven guilty in court.
If convicted of the charges in the indictment, Whittington faces a statutory maximum penalty of 480 years in federal prison. If convicted, Moore faces a maximum of 240 years, and Torres faces up to 200 years. The government will also seek forfeiture of real estate and money derived from the scheme if the defendants are convicted. This investigation was conducted by the Federal Bureau of Investigation and SIGTARP, with the assistance of the Bossier Parish Sheriff’s Office in Bossier City, Louisiana, and the Ventura County Sheriff’s Department. During Tuesday’s arrest of Zavala, SIGTARP agents were assisted by the Federal Housing and Finance Agency and the Benicia Police Department.