Five people sentenced to prison for defrauding investors out of $17 million
Five people were sentenced to prison for their roles in a conspiracy to defraud about 70 investors out of approximately $17 million, law enforcement officials said.
Kenneth Grant, of Copley, was sentenced to 92 months in prison.
Thomas Abdallah, of Brunswick, was sentenced to 82 months in prison.
Jerry Cicolani, formerly of Richfield, was sentenced to 57 months in prison.
Jeffrey Gainer, of Copley, was sentenced to 52 months in prison.
Mark George, of Independence, was sentenced to 21 months in prison.
Kelly Hood, formerly of Richfield, was sentenced to one year of home confinement followed by probation.
Collectively, the defendants were also ordered to repay more than $17 million in restitution.
All six previously pleaded guilty to charges related to the case.
“These defendants swindled people out of millions of dollars so they could live extravagant lifestyles,” U.S. Attorney Carole S. Rendon said. “This was flat-out fraud. The defendants knew fully that they were stealing from the investors.”
“These defendants callously preyed on the desires of many to make wise investments for a secure future and duped them out of their life savings,” said FBI Special Agent in Charge Stephen D. Anthony. “Fraudsters such as these remain a top priority of the FBI.”
“When you knowingly mix deceit and trickery into the financial well-being of individuals, you create a recipe for devastation that could last a lifetime,” said Special Agent in Charge of IRS Criminal Investigation.” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Combining the financial investigative expertise of the IRS with the skills and resources of the FBI and the U.S. Attorney’s Office makes a formidable team for combating major, greed-driven crimes.”
Abdallah and Kenneth Grant owned and operated KGTA Petroleum, Ltd. They and others marketed KGTA as a company that earned profits from buying and selling crude oil and refined fuel products. They represented to investors that they had relationships with third-party purchasers and investor funds would be used to purchase fuel products at a discount and then resold at substantial profit, according to court documents.
KGTA issued investment agreements and promissory notes which offered guaranteed monthly payments up to five percent per month or annual payments of approximately 60 percent per year, according to the information. The defendants never filed documentation about KGTA with the Securities and Exchange Commission, according to court documents.
Together, they obtained approximately $31 million from about 70 investors between 2010 and 2014 through false and fraudulent pretenses. They knew KGTA did not have agreements in place to sell oil and fuel. Instead, the defendants used investor money for personal expenditures and luxury items including a Mercedes Benz, a boat and mortgage payments on high-end residential property, according to court documents.
The defendants defrauded the investors out of approximately $17 million as a result of the conspiracy.
This case was prosecuted by Assistant U.S. Attorneys Mark S. Bennett and M. Kendra Klump following an investigation by the Federal Bureau of Investigation and Internal Revenue Service—Criminal Investigations.