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An official website of the United States government. A North Carolina company known as ZeekRewards, or Zeekler, solicited investors worldwide to participate in its penny-auction business where participants could bid on popular merchandise in 1-cent increments. You are a liar, a serial liar. All rights reserved. 3553(a) (" 3553(a)") factors do not support a reduced sentence. This case should serve as a warning to those thinking of committing fraud., FDIC OIG Special Agent in Charge Wade V. Walters stated, The sentencing of Mr. Wannakuwatte today reflects fitting punishment for a fraud scheme that victimized so many trusting individuals, businesses, government agencies, financial institutions, and others. Theres no way I can make the victims whole, Nunley said. When you realize the case has problems from the defense side, you want to recognize those problems early on, Heller said after the court hearing. We are committed to aggressively pursue those who attempt to circumvent the law for personal gain., This case shows that the appearance of success can mask a tangled financial web of lies, said Acting Special Agent in Charge Thomas McMahon, IRS-Criminal Investigation. For example, one two-month period resulted in $8,000 in legitimate revenue and $1.7 million in new investments. UNITED STATES OF AMERICA, Plaintiff, v. DEEPAL WANNAKUWATTE, Defendant. During that time frame, he fraudulently obtained in excess of $230 million from more than 150 victims, including individuals, businesses, government agencies, and financial institutions. One Florida man went a bit too far in relying on the heavens for riches. But prosecutor Michael Beckwith had called the evidence overwhelming, and defense attorney Donald Heller said it was clear almost from the start that a plea bargain made more sense than a trial. A locked padlock The total value of the properties, vehicles, business interests, and bank accounts is estimated to be at least $3.5 million. - Be wary of an investment opportunity that offers unusually high yields. emailStay Connected Wannakuwatte told his victims that his Sacramento-based companiesInternational Manufacturing Group (IMG) and Relyaid Global Health Carewere involved in the international manufacture and sale of latex gloves. 1B1.13, cmt. If convicted, Wannakuwatte faces a maximum sentence of 30 years in prison and a $1million fine for each count. And in 2012, Bank of Internet issued a $1.26 million mortgage to Deepal Wannakuwatte, a Sacramento businessman who received a 20-year prison sentence last year for operating, for more than 10 . The scheme, which spanned decades, ultimately caused at least $17 billion in losses to thousands of investors. The warden denied Defendant's request on May 13, 2020. He is a shadow of the man. And after several months of reviewing more than 10 years worth of business records, analyzing tax and other financial documents, conducting interviews of employees and victims, serving search warrants, etc., law enforcement was able to piece together how the scam worked. . Mar. This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General, Office of Investigations. Defendant also fails to specify the nature of his serious lung disorders or the cause of his severely compromised immune system. In total, authorities estimated that Susi Farms took in more than $100 million from at least 8,000 investors. Barely three months ago, Deepal Wannakuwatte was the picture of success: owner of a medical-supply company and of the Sacramento Capitals professional tennis team. (ECF No. These claims were not true but were made in order to appear more credit worthy. [1] [2] The new Las Vegas team was shut down a few weeks later, before it even started after owner Deepal Wannakuwatte was arrested for running a Ponzi scheme. Viking advertised itself as operating a high-yield, low-risk investment strategy that offered above-average returns by making secured loans to borrowers at inflated interest rates. Court records show that the companys revenue last year totaled less than $5 million. (ECF No. Over twelve years (2002 to 2014), Wannakuwatte convinced several investors that their money was financing RelyAid Global Healthcare, a manufacturer of latex medical gloves which Wannakuwatte claimed had $125 million worth of contracts with the U.S. Department of Veterans Affairs. Wannakuwatte was supposed to be sentenced Aug. 7. Wannakuwatte will be sentenced July 24 by U.S. District Judge Troy Nunley. Experts said it would have been difficult for Wannakuwatte to withdraw his guilty plea, and his new lawyer, Cozens, announced to the court in September that his client was ready to be sentenced. A .gov website belongs to an official government organization in the United States. 3582 (C) (1) (A) (i). Many of these so-called net winners later faced clawback lawsuits by the court-appointed bankruptcy trustee seeking to recover funds for Madoffs victims who were not as fortunate. There, the judge said, Deepal, you are a sociopath. He falsely claimed that his companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. In the early 20th century, a little-known Italian immigrant gained international notoriety after his investment venture promising astronomical returns through the resale of postal reply coupons was proved to be mathematically impossible. (ECF No. Fri, Aug 12 2016 4:30 PM EDT. A .gov website belongs to an official government organization in the United States. However, there were very few legitimate loans, and the Palladinos paid the advertised interest by simply using funds from new investors. . Share sensitive information only on official, secure websites. 18 U.S.C. IMG's CEO, Deepal Wannakuwatte, told banks and investors that IMG had a $100-million contract with the U.S. Department of Veterans' Affairs ("VA") to provide medical gloves at facilities around the countrysubject only to his ability to raise capital to purchase or import the gloves from Asia. An official website of the United States government. The sentence imposed today is tantamount to a life sentence, although no amount of prison time will undo the harm he caused to so many victims. Contrary to his representations, Wannakuwatte used much of the money he obtained to pay himself and his family, make lulling payments to participants in his fraudulent investment schemes, and pay outstanding debts unrelated to his false representations. The lesson learned from a case like this? Have a question about Government Services? How to Send Money To Deepal Wannakuwatte's Inmate Trust Fund! Since 2008, at least 500 Ponzi schemes were uncovered worldwide, including Bernard Bernie Madoffs legendary $17 billion scheme. This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General, Office of Investigations. Using a series of talking points provided by Wannakuwatte, the IMG employee told the Bridge Bank representative that there were more than 60 invoices showing a total of more than $25.8 million in payments owed by the VA to IMG. One of the ways investors were solicited to invest with JCS Enterprises was through the placement of videos on YouTube. See, e.g., United States v. Eberhart, No. A .gov website belongs to an official government organization in the United States. (ECF No. Secure .gov websites use HTTPS Wannakuwatte used this to fund other business ventures, make adequate payments to his investors and lenders to keep the scam going, and line his own pockets. The bank settled the charges by paying over $2 billion in penalties. A lock () or https:// means you've safely connected to the .gov website. They all painted a picture of a man who preyed on mostly elderly investors and duped many of them out of their retirement savings. Wannakuwatte ran a Ponzi scheme in California through his company, International Manufacturing Groupone where money from new investors goes to interest payments from older investorsfor nearly a decade before the scam imploded in 2014. It's time to renew your membership and keep access to free CLE, valuable publications and more. The functioning of a Ponzi scheme is inherently simple. According to prosecutors, Wannakuwatte duped individual investors and professional bankers alike into pouring $150 million into the company over the past decade or so. U.S. Attorney's Office, Eastern District of California, Domestic Violence, Child Exploitation, and Human Trafficking Prevention, Sacramento Businessman Indicted For Bank Fraud, Mexican National Residing in Bakersfield Sentenced to 18 Months in Prison for Illegal Cockfighting in Violation of the Animal Welfare Act, Laser Strikes on Kern County Sheriff Helicopter Lead to Prison Sentence, Federal Agent Pleads Guilty to Making False Statements in Connection with a Sexual Relationship with a Victim Witness. No Thanks . According to court documents, from 2002 to 2014, Wannakuwatte convinced nearly 200 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Florida authorities arrested four people and charged them with orchestrating a $70 million Ponzi scheme that promised hefty returns to investors who thought their returns were coming from an investment in a virtual concierge machine. The loss has devastated him, according to a letter from his wife, Jayna. /content/aba-cms-dotorg/en/groups/litigation/committees/criminal/practice/2015/sacramento-capitols-former-owner-ordered-to-pay-restitution-in-ponzi-scheme. Therefore, the Court need not address whether Defendant is a danger to the community or the 18 U.S.C. He claimed the funds obtained through the line of credit would be used to improve a glove manufacturing facility he owned in Olivehurst. He will also surrender $8 million to $12 million worth of federal income tax refunds. Professional and Commercial Equipment and Supplies Merchant Wholesalers Merchant Wholesalers, Durable Goods Wholesale Trade Printer Friendly View Address: 879 F St Ste 120 West Sacramento, CA, 95605-2384 United States Phone: ? Police see link to similar incidents. And while his victims suffered, Wannakuwatte purchased luxury homes, vehicles, airplanes, and even a professional tennis team. Gurus Emu-Raising Ponzi Scheme. In addition to fulfilling their divine duties, Mr. Hibbert told parishioners he could generate monthly returns of up to 8.5% through his skills as a foreign currency trader. The total losses to investor victims exceeds $100 million. Madoffs Jewish heritage attracted a large amount of Jewish investors, and his stature in the financial industry was enough for numerous charitable and educational foundations to entrust their money to him. In addition, Persaud touted his status as a certified financial planner to assure investors that their funds were safe. U.S. Attorney's Office, Eastern District of California, Domestic Violence, Child Exploitation, and Human Trafficking Prevention, Former Owner Of Sacramento Capitals Tennis Team Sentenced To 20 Years In Prison For Fraud Scheme Exceeding $100Million In Losses, Mexican National Residing in Bakersfield Sentenced to 18 Months in Prison for Illegal Cockfighting in Violation of the Animal Welfare Act, Laser Strikes on Kern County Sheriff Helicopter Lead to Prison Sentence, Federal Agent Pleads Guilty to Making False Statements in Connection with a Sexual Relationship with a Victim Witness.