Federal and International

Nevada Man Sentenced to 25 Years in Prison for Perpetrating a Nationwide Multimillion-Dollar Fraud Scheme

Defendant Defrauded Investors in a Nigerian Oil Scheme and Made False Claims to the Department of Veterans Affairs

NEVADA–(ENEWSPF)–July 19, 2016.   A Las Vegas resident was sentenced to 25 years in jail today on multiple fraud charges, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

Anton Paul Drago, formerly known as Evan Fogarty, 65, was convicted in March 2016 of all 10 counts of the indictment after an eight-day jury trial.  The jury found him guilty of one count of conspiracy to commit wire fraud, two counts of wire fraud, three counts of submitting false claims to the U.S. Department of Veterans Affairs (VA), one count of theft of government funds, one count of passing a fictitious financial instrument, one count of making false statements to federal agents and one count of failing to file a federal income tax return.

“Today’s sentence reflects the serious nature of Mr. Drago’s crimes and the substantial harm he inflicted on his investors and the U.S. government,” said Principal Deputy Assistant Attorney General Ciraolo.  “When confronted with his extensive fraudulent conduct by federal agents, rather than come clean, Mr. Drago chose to double down on his lies and continue the scheme that funded his extravagant lifestyle.  Today, he paid the heavy price for his illegal activities.”

“We are pleased with today’s sentencing of Anton Drago for his crimes against the U.S. government and innocent taxpayers and shareholders,” said Chief Richard Weber of IRS-Criminal Investigation (CI).  “Everything about Mr. Drago’s business was a fraud and he made the costly mistake of failing to file his income tax return.  That mistake brought him to the attention of the IRS and the scrutiny of CI special agents.  Fortunately for the victims of his fraud, the resulting investigation revealed the depth of his fraudulent dealings.”

“Our joint investigation with the IRS’s Criminal Investigation resulted in the conviction of a veteran who defrauded the government by claiming monetary benefits he wasn’t entitled to,” said Special Agent in Charge Douglas J. Carver VA-Office of Inspector General’s Western Field Office.  “The money he stole would have benefited other eligible disabled veterans.  We are pleased that this sentence reflects the seriousness of his crimes and believe this conviction will serve as a deterrent to others who might consider defrauding the Department of Veterans Affairs and our country’s veterans.”

The evidence presented at trial established that Drago orchestrated a large-scale Nigerian oil investment fraud scheme.  From at least 2004 through 2012, Drago told investors that money they invested would be used for legal fees and business expenses to fund the production, refinement and shipment of crude oil from Nigeria to the Bahamas.  Along with co-conspirator Joseph Rizzuti, formerly of Palm City, Florida, Drago also told investors that the money they invested would fund the purchase of an oil refinery in the Bahamas.  Drago lied to investors about his background, falsely claiming that he was an engineer and an expert in the oil industry with over 30 years of experience working worldwide.  He also falsely told some investors that he was the grandson of the Shell Oil founder and heir to a $500 million trust which he invested in the Nigerian oil investment deal.  None of these claims were true.

The government also presented evidence to establish that Drago and Rizzuti contracted with investors, promising them a short-term turnaround on their investment in just 60 days with a return of up to 400 percent.  Unwitting investors gave the conspirators more than $2 million.  Instead of investing in a Nigerian oil deal as promised, Drago and Rizzuti used most of the investors’ money for personal expenses.  Specifically, Drago spent the money on rent; groceries; memberships at the Tournament Players Club Summerlin golf course and an exclusive activity club in Turnberry Towers, both in Las Vegas; maintenance on his Mercedes Benz; jewelry; travel; and luxury purchases at stores such as Louis Vuitton, Nordstrom and Sharper Image.  In addition, nearly $1 million of the investors’ money was transferred to unknown bank accounts in China.  Despite Drago’s receipt of income from this fraudulent scheme, he failed to file his 2007 federal income tax return in a timely manner.

After spending the investors’ money, Drago continued to lie to the investors about other elaborate oil-related schemes that would make them whole.  He attempted to negotiate a fictitious financial instrument purporting to be an International Bill of Exchange worth $10 million at a Wells Fargo Bank branch in Las Vegas.  He also lied to federal agents of the IRS, who were investigating him when he told them that every penny of investor money went to Nigeria.

At the same time he was perpetrating the fraudulent Nigerian oil investment scheme, Drago also falsely claimed individual unemployability compensation benefits from the VA.  Drago served in the U.S. Marine Corps.  The evidence at trial established that for decades, Drago falsely claimed to have a debilitating military service-related knee injury and was totally unable to work in any capacity, when in fact he was self-employed and running several businesses.  The evidence showed that Drago was active and an avid golfer, spending more than $100,000 on golf-related expenses between 2005 and 2008.  Based upon his false claims to the VA, he received thousands of dollars in monthly VA benefits to which he was not entitled.

Rizzuti, who testified at Drago’s trial, previously pleaded guilty to a wire fraud conspiracy and an unrelated charge of obstructing the internal revenue laws and was sentenced in May 2013 to 80 months in prison.

In addition to the term of imprisonment, Drago was sentenced to pay $2.3 million in restitution and to serve five years of supervised release following his prison term.

Principal Deputy Assistant Attorney General Ciraolo commended the special agents of IRS–CI and the VA-Office of Inspector General, who investigated the case, and Trial Attorneys Charles M. Edgar Jr. and Sean Beaty of the Tax Division, who prosecuted the case.  Principal Deputy Assistant Attorney General Ciraolo also thanked litigation technical support specialist John L. Kost, who provided trial support, and the U.S. Attorney’s Office of the District of Nevada, who provided invaluable assistance to the Tax Division.

Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.

Source: http://www.justice.gov