Five Defendants Admit Their Roles In Overseas Investment Scams
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney James P. Kennedy, Jr. announced today that Gene Foland, 58, Jeffrey G. Klein, 63, Joel Marcus, 79, all of Florida, Saad Shuaib, 49, a citizen of Kuwait, and Walter Tatum, 60, of California, each pleaded guilty before U.S. District Judge Elizabeth A. Wolford to conspiracy to commit wire fraud. The charge carries a maximum penalty of 20 years in prison and a $250,000 fine.
Assistant U.S. Attorneys Russell T. Ippolito, Jr. and Paul E. Bonanno, who are handling the case, stated that the defendants participated in a “boiler room” scam that operated in Barcelona, Spain. Members of the conspiracy, working in the Spain boiler room, conned investors in the United Kingdom and Canada into buying nearly worthless shares of restricted stock at severely inflated prices by telling buyers that they were buying more valuable freely traded shares of stock.
Approximately 250 investors lost more than $2,900,000 to the defendants, and a number of other conspirators. A portion of the criminal proceeds were funneled through a bank account in Western New York before being sent to numerous overseas accounts controlled by members of the conspiracy. Foland’s role in the conspiracy was to offer assistance and advice to the managers of the Barcelona boiler room and to procure worthless restricted stock for the boiler room to sell. Klein, an attorney, served as the escrow agent for the fraudulent stock transactions. Marcus, Tatum and Shuaib sold worthless restricted stock to the boiler room conspirators, who then sold the restricted stock to unsuspecting investors as though the stock was the more valuable freely trading stock.
A total of 10 defendants involved in the boiler room scam have been convicted. Charges are pending against two other defendants, including one defendant who is fighting extradition in England. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
The pleas are the result of an investigation on the part of Immigration and Customs Enforcement, Homeland Security Investigations, under the direction of Kevin Kelly, Special Agent-in-Charge of the Buffalo Office, and the Internal Revenue Service, Criminal Investigations Division, under the direction of James D. Robnett, Special Agent-in-Charge.
Sentencings are scheduled for January 15, 2019, before Judge Wolford.
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