Self-Described Investment Fund Manager Sentenced To 57 Months’ Imprisonment In $5 Million Fraud Scheme
Schemers Used Phony HSBC Documents And Purported Attorney Escrow Account To Dupe Lone Victim
Earlier today, Thomas Bannon, the president of Overseas Investors LLC and Overseas Investors International, Ltd. (collectively, “Overseas Investors”), was sentenced in federal court in Brooklyn, New York to 57 months’ imprisonment and ordered to pay $5,001,949 in restitution. In June 2014, Bannon had pleaded guilty to wire fraud for defrauding an individual entrepreneur of $5 million through, among other things, false representations about his access to hedge funds and wealthy investors. Co-defendant Theodore Sweeten pleaded guilty in June 2013 to wire fraud and was sentenced to 48 months in prison in January 2014. Co-defendant Robert Bardey was convicted by a federal jury on all counts, including wire fraud and perjury, on October 28, 2014, and is scheduled to be sentenced on February 11, 2015.
The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Thomas Bannon claimed to have access to the wealthy and their millions of dollars. In reality, Bannon’s only access was to other fraudsters and phony bank documents which he used to perpetrate this audacious fraud on an unsuspecting investor. We hope that this conviction and sentence serve as a warning to others engaged in such fraudulent conduct that they will be held accountable and face imprisonment for their actions,” stated United States Attorney Lynch. Ms. Lynch expressed her appreciation to the FBI, the agency responsible for the investigation.
Bannon falsely represented to the victim that Overseas Investors collaborated with hedge funds and wealthy investors who were willing, in exchange for a substantial fee, to “lease” funds and set up bank accounts in its clients’ names that contained the leased funds. Based on this and other misrepresentations, Bannon and his co-conspirators induced the victim to invest $5 million in order to “lease” a credit line of $100 million, which in turn would enable them to generate millions of dollars in profit through special investment programs. In furtherance of that scheme, Bannon and his co-conspirators falsely represented that the victim’s funds would be held in an attorney escrow account pending confirmation of the posting of $100 million in the leased-funds account. In fact, Bannon and his co-conspirators simply distributed the victim’s $5 million among themselves and falsely represented that a $100 million account had been created at HSBC by sending the victim fabricated bank documents on HSBC letterhead.
When the victim discovered that the bank documents on HSBC letterhead were phony, he requested a refund of the $5 million that he had deposited into the attorney escrow account. In response, Bannon and his co-conspirators told the victim that the money had been disbursed to the investors who created the $100 million account. In particular, Bannon concealed from the victim the fact that he had requested and received $600,000 of the escrowed funds prior to the issuance of the fabricated HSBC documents.
The sentence was imposed by United States District Judge Nicholas G. Garaufis.
The government’s case is being prosecuted by Assistant United States Attorneys Winston M. Paes and Marcia M. Henry.
This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
Residence: New York, New York
E.D.N.Y. Docket No. 12-CR-471