CEO Of Security Company Charged With Multimillion-Dollar Stock And Carbon Credit Fraud
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and Jonathan D. Larsen, the Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today the unsealing of an indictment charging ROGER RALSTON – the CEO of DirectView, Inc., a video surveillance and security company based in Florida – with wire fraud and money laundering charges relating to his role in a telemarketing scheme involving the fraudulent sale of DirectView stock and carbon credits to victims in the United Kingdom. RALSTON was arrested this morning in Orlando, Florida, and will be presented in Magistrate Court in the Middle District of Florida later today. The case is assigned to United States District Judge Jesse M. Furman.
U.S. Attorney Geoffrey S. Berman said: “As alleged, Roger Ralston preyed on retirees in the United Kingdom with promises of safe, environmentally friendly investments with big returns. The victims allegedly received nothing but worthless paper certificates in exchange for their life savings, while Ralston and his criminal associates hid the proceeds in the United States and overseas. After today, there is no more hiding for Ralston, who now faces many years in prison for his alleged crimes.”
IRS-CI Special Agent in Charge Jonathan D. Larsen said: “The elderly members of society are too often the victims of financial fraud. As alleged, Mr. Ralston defrauded these victims and then laundered the ill-gotten gains through domestic and foreign bank accounts. IRS-CI special agents will continue to follow the money around the world and prosecute those individuals who prey on the elderly.”
According to the allegations in the Indictment unsealed today in Manhattan federal court and statements made during court proceedings:
At all times relevant to the charges in the Indictment, RALSTON was the CEO of DirectView Holdings, Inc. (“DirectView”), a Florida-based corporation.
From in or about 2009 up to and including in or about 2015, RALSTON and other co-conspirators engaged in a scheme to defraud victims in the United Kingdom through the sale of false, fraudulent, and materially misleading investments, and to launder the proceeds through bank accounts in the United States and foreign countries. RALSTON used the services of telemarketing call centers to identify and cold-call potential victims, who were primarily individuals residing in the United Kingdom. Many of the victims were elderly or retired. Over a series of telephone calls, the telemarketers persuaded victims to invest money under various false and misleading pretenses, including the promise of short-term, high-yield, no-risk returns, when in fact the investments were high-risk, illiquid, and in some instances, entirely fictitious. Many victims were persuaded to make additional investments under the false pretense that they would not be permitted to sell their holdings until they purchased more. In reliance on the false representations and promises, the victims wired funds to various bank accounts in the United States, including in the Southern District of New York, in the names of corporate entities controlled by RALSTON. RALSTON then mailed and emailed documents related to the fraudulent investments, including purchase contracts and investment certificates, to the victims. Victims who tried to sell their investments found they were unable to do so. The victims never received a refund on their principal or any return on their investments. In total, RALSTON’s accounts received approximately $9 million from victims.
In order to conceal the nature, location, source, ownership, and control of the proceeds of the fraudulent scheme, RALSTON regularly transferred a substantial portion of the fraud proceeds from bank accounts in the United States, including in the Southern District of New York, to overseas bank accounts, including accounts in Cyprus, Switzerland, and the United Kingdom, in the names of various shell companies.
The nature of the particular fraudulent investment vehicles being marketed to the victims changed over time. From in or about 2009 until in or about 2011, RALSTON and his co-conspirators sold DirectView stock to the victims based on telemarketers’ false representations and promises that the shares were a no-risk, short-term investment in a debt-free company, and that the shares were likely to increase over 100 percent in value in a short period of time. In contrast to what RALSTON represented to victims, DirectView’s annual report filed with the United States Securities and Exchange Commission (“SEC”) for the year ending December 31, 2010, contained dire warnings about the poor fiscal health of DirectView and the risk attendant in purchasing stock, including that the company “may be forced to cease operations” due to losses and cash flow problems, and purchasers “may find it extremely difficult or impossible to resell our shares.”
From in or about 2011 until in or about 2015, RALSTON and his co-conspirators engaged in the sale of fraudulent “carbon credits.” “Carbon credits,” which are issued as part of governmental and voluntary regulatory regimes, are permits representing the right to emit a certain number of tons of carbon dioxide into the atmosphere. “Carbon offsets,” which are tied to particular carbon dioxide emissions-reducing projects, represent a reduction in carbon dioxide emissions, and can be purchased by individuals and companies to “offset” their or third parties’ “carbon-footprints.” The victims were falsely promised that the carbon-related investments they purchased could be easily sold, carried no risk, and would yield a significant, short-term return. In fact, the carbon credits and offsets that were sold to the victims were fake, and did not represent any actual carbon credits or offsets.
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RALSTON, 51, of Riviera Beach, Florida, is charged with conspiracy to commit mail and wire fraud, substantive mail fraud, and substantive wire fraud, with a penalty enhancement for telemarketing, each of which carries a maximum sentence of 30 years; conspiracy to commit money laundering and two counts of money laundering, each of which carries a maximum sentence of 20 years; and one count of engaging in monetary transactions in property derived from specified unlawful activity, which carries a maximum sentence of 10 years.
The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Mr. Berman praised the outstanding investigative work of IRS Criminal Investigation in this case.
This case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises and Complex Frauds and Cybercrime Units. Assistant U.S. Attorneys Jessica Feinstein and Olga I. Zverovich are in charge of the prosecution.
 As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth below constitute only allegations, and every fact described should be treated as an allegation.
James Margolin, Nicholas Biase