NEWNAN, GA—JEFFREY WALLACE “J.W.” EDWARDS, 43, of Bremen, Georgia, has been indicted by a federal grand jury on charges of mail fraud, wire fraud, and money laundering in connection with an alleged $7 million fraud scheme. EDWARDS was arrested this morning and has made an initial appearance before a federal magistrate. EDWARDS is scheduled to have his bond hearing before United States Magistrate Judge Linda Walker on Monday, May 18, at 10:00 a.m. The indictment had been sealed until his first court appearance.

United States Attorney David E. Nahmias said, “In this latest chapter in the long book of investment fraud schemes, a man who lives in a small town in west Georgia allegedly persuaded investors from around the country that with his secret government contacts and other plans, he could make their money multiply into millions. He will now be prosecuted in open court, where he is alleged to actually be just a thief who used lies to steal millions from his victims.”

IRS Criminal Investigation Special Agent in Charge Reginael McDaniel said, “If it sounds to good to be true, it probably is.  People should diligently check out claims of high rates of return before investing.  They should not blindly follow the advice of one person, and should always get a second opinion.”

According to United States Attorney Nahmias, the charges and other information presented in court: Starting in early 2006, EDWARDS allegedly promised investors that they would receive returns of between 40 and 150 percent on the money they placed in his “high yield” investment programs. EDWARDS variously claimed to own a bank, to have access to confidential and lucrative investment opportunities, or to be a “special agent” of the Federal Reserve whom the United States Government had authorized to stimulate the economy with cash injections. Between February 2006 and February 2007, 31 investors mailed or electronically transferred over $7.4 million to EDWARDS, who allegedly spent the money on Haralson County real estate, vehicles, jewelry, fur coats, art, gambling trips to Las Vegas, and family cruises to Alaska, Hawaii and the Mediterranean. EDWARDS allegedly never invested any money, though he did make nominal payments to a few investors who persisted in asking to see their returns.

The indictment includes charges of mail fraud, wire fraud, and money laundering. The mail and wire fraud charges each carry a maximum sentence of 20 years in prison and a fine of up to $250,000, and the money laundering charges each carry a maximum sentence of 10 years in prison and a fine of $250,000. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders

The indictment also includes a provision seeking to forfeit real estate, vehicles, and cash that allegedly were proceeds of the fraud scheme. Additionally, in June 2008, the Government filed forfeiture liens on EDWARDS’ real estate holdings, and it seized his Cadillac Escalade, Lincoln Town Car, and Lincoln Mark LT pickup truck.

Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.

This case is being investigated by Special Agents of the Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation.

Assistant United States Attorney William G. Traynor is prosecuting the case.

For further information please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.

ATLANTA CURRENCY TRADER CHARGED WITH OPERATING $25 MILLION PONZI SCHEME

James G. Ossie’s Scheme Allegedly Defrauded Over 120 Investors In Just 9 Months

Atlanta, GA—JAMES G. OSSIE, 49, of Atlanta, the founder and principal of an Alpharetta, Georgia-based currency trading firm, “CRE Capital, Inc.,” has been indicted by a federal grand jury on 10 counts of wire fraud. OSSIE is scheduled to surrender in federal court on Friday, March 20, 2009, for an initial appearance, bond hearing, and arraignment.

United States Attorney David E. Nahmias said, “This indictment alleges yet another disturbing Ponzi scheme with a similar result: many victims lose a lot of their hard-earned money in a short amount of time. These fraudulent schemes rely on attracting investors who are willing to believe in claims that are too good to be true. These cases are getting a lot of attention for a reason. They are major investment fraud schemes, and the masterminds are finding themselves arrested and facing serious charges and prison time.”

According to United States Attorney Nahmias, the indictment and other information presented in court: OSSIE and CRE Capital operated an investment fund for private clients focused on options contracts in foreign currencies.  The fund operated from approximately April 2008 into January 2009, when it was shut down by the United States Securities and Exchange Commission (“SEC”).

OSSIE and CRE offered investment contracts, in amounts of at least $100,000, that guaranteed the return of an investor’s deposit plus 10% interest within just 30 days.  OSSIE claimed to be able to pay such substantial monthly returns because he typically made even more than that through his trading activity.  OSSIE also claimed that his trading profits allowed him to fund a substantial cash “reserve fund” sufficient to re-pay all investors their deposit plus 10% monthly profit, in case the market deteriorated.  OSSIE claimed that CRE Capital even hired outside accountants, or auditors, who reviewed and confirmed the accuracy of the numbers. The indictment also alleges that although CRE hired outside accountants for limited projects, OSSIE did not allow any access to the records of the trading accounts that would have revealed his substantial losses.

OSSIE made these representations directly to individual investors, through salespersons known as “correspondents,” through the CRE Capital website, and in numerous mass conference calls involving groups of investors and prospective investors.

However, the indictment alleges that these representations were all lies.  Instead of making profits sufficient to pay 10% monthly returns and fund a “reserve” account, the indictment alleges that OSSIE lost millions of dollars. Just during CRE’s 9-month lifespan, the firm lost over $12 million in its foreign currency trading accounts. The indictment alleges that there was no “reserve” account sufficient to repay investors. By the end of 2008, CRE owed over $23 million in pending investment contracts but only had just over $2 million deposited in all of its bank and trading accounts combined.

Because he was making no profits, OSSIE was only able to re-pay investors their deposits and guaranteed 10% returns through what is referred to as a “Ponzi” scheme.  Specifically, OSSIE allegedly paid his debts to existing investors with money recently invested by new investors.  When the time came to pay the returns promised to the new investors, OSSIE would recruit more investments from still newer investors.  This unsustainable scheme was identified and shut down by the SEC in January 2009.  In the meantime, OSSIE had raised over $25 million from over 120 investors, approximately half of which was lost in unsuccessful currency trading.

United States Attorney Nahmias and the FBI noted that this investigation remains ongoing.

Members of the public are reminded that the indictment contains only allegations.  A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.

This case is being investigated by Special Agents of the Federal Bureau of Investigation.

Assistant United States Attorneys Justin S. Anand and Douglas W. Gilfillan are prosecuting the case.

For further information please contact David E. Nahmias (pronounced NAH-me-us), United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016.  The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.

WASHINGTON – A former chief operating officer of Investment Properties of America, based in Richmond, Va., pleaded guilty today to conspiring to commit mail and wire fraud and to making a material false statement to federal investigators, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and Acting U.S. Attorney Dana Boente for the Eastern District of Virginia announced.

On July 10, 2008, a federal grand jury returned a superseding indictment against Lara Coleman, 40, for her role in a scheme to defraud and obtain millions of dollars in client funds held by the 1031 Tax Group (1031TG), a qualified intermediary company owned by the same person who owned Investment Properties of America.

Coleman, a resident of Houston, entered the guilty plea in U.S. District Court in Richmond before U.S. District Judge Robert E. Payne.  Coleman pleaded guilty to one count of the superseding indictment that charged her with conspiracy to commit mail and wire fraud and to a one-count information charging her with making a material false statement to federal investigators.

According to the plea agreement and statement of facts, Coleman and others used 1031TG and its subsidiaries in a scheme to obtain millions of dollars of client funds by false pretenses.  Section 1031 of the Internal Revenue Code allows investment property owners to defer the capital gains tax that would otherwise be due on properties sold, if the proceeds are used to purchase new property in a specified time frame.  To facilitate such exchanges, investment property owners deposit the proceeds from the sale of their property with qualified intermediaries and sign exchange agreements, which include various promises by the qualified intermediaries to clients regarding the safekeeping of exchange funds in trust.

In the plea agreement and statement of facts, Coleman admitted that 1031TG falsely represented that it would hold client funds solely to complete the clients’ 1031 exchanges.  Coleman admitted that after obtaining clients’ exchange proceeds with that false promise, she and others misappropriated approximately $132 million in client funds to support the lavish lifestyle of the owner of 1031TG, pay operating expenses for the owner’s various companies, invest in commercial real estate and purchase additional qualified intermediary companies to obtain access to additional client funds.  In addition, Coleman admitted that she lied to federal investigators about statements that she had made in 2006 to internal attorneys for Investment Properties of America about the amount of money that she and others had misappropriated.

Coleman has agreed, under the terms of the plea, to a sentence of 10 years in prison. At sentencing, scheduled for May 1, 2009, she also faces a $500,000 fine.  In addition, the indictment seeks forfeiture of all funds and assets owned by Coleman that were derived from or connected to the misappropriation of the approximately $132 million in 1031TG funds.

In related cases, Robert D. Field II and Richard E. Simring have pleaded guilty to participating in the conspiracy to defraud 1031TG customers. Field was the chief financial officer and Simring was the chief legal officer of a holding company that was set up, in part, to oversee both Investment Properties of America and 1031TG, however neither company was ever officially made a subsidiary of the holding company. Both men are also scheduled to be sentenced on May 1, 2009.

This case is being prosecuted by Assistant U.S. Attorney Michael S. Dry for the Eastern District of Virginia and Trial Attorney Brigham Cannon of the Criminal Division’s Fraud Section.  This continuing investigation is being conducted by the U.S. Postal Inspection Service, Internal Revenue Service and the FBI.

Litigation Release No. 20816 / November 20, 2008

Securities and Exchange Commission v. Jaisankar Marimuthu, Chockalingam Ramanathan and Thirugnanam Ramanathan, Civil Action No. 8:07CV94 (D. Neb.)

OFFSHORE HACKER PERMANTLY ENJOINED FROM FUTURE VIOLATIONS OF THE FEDERAL SECURITIES LAWS

The United States Securities and Exchange Commission today announced that on November 19, 2008 Thirugnanam Ramanathan, a native of Chennai, India, and legal resident of Malaysia, consented to the entry of a final judgment permanently enjoining him from violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In a related criminal action, Ramanathan was sentenced to a two year prison sentence followed by three years of supervised release and an order requiring him to pay $362,247 in restitution. Based on the sanctions imposed in the criminal proceedings, the defendant was not ordered to pay disgorgement or a civil penalty.

In January 2007, Ramanathan was indicted by a federal grand jury in Omaha along with his brother Chockalingam Ramanathan and Jaisankar Marimuthu, also residents of Chennai. Marimuthu and Chockalingam Ramanathan were charged with one count of conspiracy, eight counts of computer fraud, six counts of wire fraud, two counts of securities fraud and six counts of aggravated identity theft. On May 25, 2007, Thirugnanam Ramanathan was arrested in Hong Kong and extradited to the United States. On July 2, 2008, Ramanathan pleaded guilty to one count of conspiracy to commit wire fraud, securities fraud, computer fraud and aggravated identity theft. Marimuthu is currently being detained in a Hong Kong prison awaiting extradition to the U.S. following his conviction there on similar offenses but related instead to the Hong Kong stock market. Chockalingam Ramanathan remains at large.

On March 12, 2007, the SEC filed a complaint in the United States District Court for the District of Nebraska charging all three Indian nationals with participating in a fraudulent scheme to manipulate the prices of at least fourteen securities through the unauthorized use of other people's online brokerage accounts.

The Commission's complaint alleges that, between July and November 2006, Jaisankar Marimuthu, Chockalingam Ramanathan and Thirugnanam Ramanathan hijacked the online brokerage accounts of unwitting investors using stolen usernames and passwords. Prior to intruding into these accounts, the defendants acquired positions in the securities of at least thirteen issuers and options on shares of another issuer. Then, without the account holders' knowledge, and using the victims' own accounts and funds, the defendants placed scores of unauthorized buy orders at above-market prices. After these unauthorized buy orders were placed, the defendants sold the positions held in their own accounts at the artificially inflated prices netting unlawful trading profits of at least $121,500. These transactions created the appearance of legitimate trading activity and pumped up the share price of the fourteen securities.

The Commission wishes to acknowledge the assistance and cooperation it received in bringing this case from the Computer Crimes and Intellectual Property section, Fraud section and Office of International Affairs in the Criminal Division of the Department of Justice, along with The United States Attorney's Office for the District of Nebraska, The Federal Bureau of Investigation, Omaha and Detroit offices and The Omaha office of Immigration and Customs Enforcement.

The Commission's Office of Investor Education and Assistance has previously issued an investor alert, available on the Commission's website, which provides tips to avoid becoming a victim of online intrusions. See http://www.sec.gov/investor/pubs/onlinebrokerage.htm.

For more information, see Litigation Release Nos. 20037 (March 12, 2007) and 20711 (September 9, 2008).

http://www.sec.gov/litigation/litreleases/2008/lr20816.htm

Fraud Cost Investors More Than $2 Billion

Press release from the U.S. Department of Justice:

WASHINGTON —A federal jury today convicted Lance K. Poulsen, former president, owner and chief executive officer of National Century Financial Enterprises (NCFE) of conspiracy, fraud, and money laundering, Acting Assistant Attorney General Matthew Friedrich of the Criminal Division and U.S. Attorney Gregory G. Lockhart for the Southern District of Ohio announced. The charges stemmed from a scheme to deceive investors about the financial health of NCFE that cost investors more than $2 billion. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.

The Columbus, Ohio, jury convicted Poulsen, 65, after a four-week trial on all 12 charged counts contained in a July 2007 superseding indictment, including one count of conspiracy, six counts of securities fraud, one count of wire fraud, one count of money laundering conspiracy, and three counts of concealment money laundering.

At trial, witnesses testified that Poulsen engaged in a scheme from 1995 until the collapse of the company to deceive investors and rating agencies about the financial health of NCFE and how investors’ money would be used. NCFE bought accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors, including pension funds, insurance companies and churches.

Evidence at trial showed that NCFE misused investors’ money and made unsecured loans to health care providers, including those owned in whole or in part by Poulsen and other owners. Former employees testified that Poulsen and other NCFE executives covered up the fraud by lying to investors and ratings agencies. The government presented evidence that Poulsen and others created investor reports containing fabricated data, and moved money back and forth between programs, in order to make it appear that NCFE was in compliance with its own governing documents. Evidence showed that Poulsen knew the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls.

“Today’s conviction closes another chapter in the long effort to bring former NCFE executives to justice for deceiving investors,” said Acting Assistant Attorney General Matthew Friedrich of the Criminal Division. “The Department will continue to hold accountable those corporate executives who misrepresent a company’s financial health and then leave the public to pick up the pieces.”

“Poulsen and others made millions of dollars in unsecured loans to companies they owned,” U.S. Attorney Lockhart said. “Their actions were designed to hide a financial house of cards from investors, eventually costing investors $2 billion.”

“The IRS, along with our law enforcement partners, will vigorously pursue corporate officers who victimize their investors and violate the public trust,” said Internal Revenue Service (IRS) Criminal Investigation Special Agent in Charge Jose A. Gonzalez. “Today's verdict demonstrates the government's determination to restore and ensure that trust.”

FBI Cincinnati Special Agent in Charge Keith L. Bennett stated, “The FBI notes that today's convictions are the culmination of a six year investigation which included the review of millions of pages of financial documents by federal investigators. The resolve of this cooperative effort demonstrates that the FBI and other law enforcement will not permit a few corporate executives to hijack our financial system for personal gain.”

The maximum penalty for each count of concealment money laundering, money laundering conspiracy and wire fraud is 20 years in prison and a $500,000 fine. The securities fraud and conspiracy charges are each punishable by up to five years in prison and a $250,000 fine. A sentencing date has not been set.

Poulsen, the sixth NCFE executive convicted in connection with the fraud, has been in custody since he was arrested on Oct. 17, 2007, on charges of witness tampering. A jury convicted him of conspiracy, witness tampering and obstruction on March 26, 2008, and Poulsen was sentenced to ten years in prison on those charges.

On March 13, 2008, five former NCFE executives were found guilty for their roles in the scheme to defraud investors. Donald H. Ayers, of Fort Myers, Fla., an NCFE vice chairman, chief operating officer, director, and an owner of the company, was found guilty on charges of conspiracy, securities fraud, and money laundering. Rebecca S. Parrett, of Carefree, Ariz., an NCFE vice chairman, secretary, treasurer, director, and an owner of the company, was found guilty on charges of conspiracy, securities fraud, wire fraud, and money laundering. Randolph H. Speer, of Peachtree City, Ga., NCFE’s chief financial officer, was found guilty on charges of conspiracy, securities fraud, wire fraud, and money laundering. Roger S. Faulkenberry, of Dublin, Ohio, a senior executive responsible for raising money from investors, was found guilty on charges of conspiracy, securities fraud, wire fraud, and money laundering. James E. Dierker, of Powell, Ohio, associate director of marketing and vice president of client development, was found guilty on charges of conspiracy and money laundering.

The case was prosecuted by Assistant U.S. Attorney Douglas Squires of the Southern District of Ohio, Senior Litigation Counsel Kathleen McGovern and Trial Attorneys Leo Wise and N. Nathan Dimock of the Criminal Division’s Fraud Section, with assistance from Fraud Section Paralegal Specialist Sarah Marberg, FBI Agents Matt Daly, Ingrid Schmidt and Tad Morris, IRS Special Agents Greg Ruwe and Mark Bailey, U.S. Postal Inspector Dave Mooney and Immigration and Customs Enforcement Agent Celeste Koszut.

R. Alexander Acosta, United States Attorney for the Southern District of Florida, Michael E. Yasofsky, Jr., Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, and Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, announced today that defendant Jeffrey Jedlicki , 38, of Delray Beach, FL, was sentenced by the U.S. District Court Judge Kenneth A. Marra to 48 months’ imprisonment, to pay $6,029,279 in restitution.  In August, Jedlicki pled guilty to an Information charging him with conspiring to commit mail and wire fraud and to defraud the United States.

According to the Information, court documents, and statements made in court, while working at multiple boiler rooms throughout South Florida, Jedlicki mislead investors into investing in foreign currency options.  Jedlicki falsely told investors that they could expect to make high profits while being exposed to little risk.  Jedlicki, however, knowingly failed to tell the investors that over 95% of those who had invested with him had lost their money and that he had been previously barred from acting as a broker by the National Futures Association.

In addition to misleading investors, Jedlicki failed to report to the Internal Revenue Service nearly  $1 million in income he had earned during tax years 2003 and 2004.  Jedlicki would divert his salary and commissions to a newly created corporation, and then falsely deduct as business expenses his personal expenses, including payments for his car, credit card bills, and meals.

Mr. Acosta commended the investigative efforts of the Internal Revenue Service, Criminal Investigation Division, and Federal Bureau of Investigation.  This case is being prosecuted by Assistant United States Attorney Jeffrey A. Neiman.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls.   Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov/ or on http://pacer.flsd.uscourts.gov/.