CHICAGO —(ENEWSPF)–September 10, 2015. Two foreign nationals have been indicted on federal fraud charges for running a $10 million telemarketing scam that targeted elderly investors in the United States.
JONATHAN PAPA and METHSIRI “LAL” PALLIYAGURU sold phony investments in certificates of deposit and real estate to nearly 200 investors, primarily American senior citizens, according to an eight-count indictment returned Wednesday afternoon in U.S. District Court in Chicago. The unsuspecting investors had been identified through online research of American retirement communities, and then contacted by call centers operated by Papa and Palliyaguru in the Philippines, according to the indictment. In some of the calls and promotional materials, Papa and Palliyaguru knowingly misrepresented that Warren Buffett and Berkshire Hathaway were involved with the purported real estate investments, according to the indictment.
From August 2008 to August 2013, the investors paid approximately $10 million to a series of companies operated by Papa and Palliyaguru, the indictment states. The defendants sent fraudulent account statements to investors that falsely stated the investments were increasing in value, when, in fact, their money had never been invested into any securities, according to the indictment.
Papa, 43, and Palliyaguru, 57, were each charged with eight counts of mail fraud that victimized ten or more persons over the age of 55. Each count carries a maximum sentence of 30 years in prison.
Both defendants are considered fugitives. Papa is believed to be residing in the Philippines, while Palliyaguru, formerly of the Philippines, is now believed to be in Canada. U.S. authorities will seek the arrests and extradition of both defendants. An arraignment date has not been scheduled.
A third defendant, AUSTIN ETCHES, previously pleaded guilty to mail fraud and cooperated with the investigation against Papa and Palliyaguru. Etches, of Toronto, Canada, was sentenced last year to 84 months in prison.
According to the indictment, the defendants managed various companies, including one called Bradley Cooper Financial Services, which purported to be in the business of offering and selling investments. They set up “virtual offices” in or near major American cities, including one at 500 N. Michigan Ave. in Chicago, to make it appear that the companies were legitimately operating inside the United States, the indictment states. The defendants also used voice-over-Internet-protocol technology to make it appear that calls from the Philippines had originated from telephone numbers in the U.S., the indictment charges.
In reality, employees of the companies were not physically present in the virtual offices, but instead worked for Papa and Palliyaguru in the Manila area of the Philippines, according to the indictment. Once the duped investors deposited funds into U.S. bank accounts controlled by Papa and Palliyaguru, the money was transferred overseas to accounts in China, Hong Kong and the Philippines, the indictment states.
The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; John A. Brown, Acting Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Antonio Gómez, Inspector in Charge of the U.S. Postal Inspection Service in Chicago.
The public is reminded that an indictment is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
The government is being represented by Assistant United States Attorney Rachel Cannon.
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Source: www.justice.gov
