FBI And IRS Trace $45 Million LA Fraud to NY CPA
A New York certified public accountant was charged in Los Angeles for his role in a fraud scheme that cost investors $45 million. The charges stem from a joint probe by the Federal Bureau of Investigation and Internal Revenue Service's Criminal Investigation unit. Altogether, prosecutors say the scam defrauded 700 investors, including NFL Hall of Fame running back Eric Dickerson and fashion model Kim Alexis.
Results of the investigation point to the CPA as the creator of bogus documents used to convince investors that the now-defunct Los Angeles firm, DFJ Italia, was financially sound. The firm promised investors returns of 24% on non-existent investments in precious metals and foreign currencies. For his part in the scheme, the CPA was charged with conspiracy, mail fraud and wire fraud.
In addition, the CPA is accused of fabricating personal and corporate income tax returns for DFJ Italia, related entities and company executives. The bogus tax returns were used in loan applications made to lenders, such as Wells Fargo Bank and Cendant Mortgage. The loans were used for a business line of credit and a home loan for a DFJ Italia executive.
No date has been set for arraignment on the charges, which could carry a sentence of up to 40 years in prison upon conviction. Media reports suggest the likelihood of a lesser penalty under federal sentencing guidelines. The CPA is 62 years of age.
According to officials, the accountant never traveled to Los Angeles to participate in the scam. He was based on Long Island in New York and was recruited by DFJ to prepare phony financial documents through an unidentified informant.