[ad_1]
Two former executives of EarthWater Limited (EarthWater), a Dallas-based company, have pleaded guilty to fraud and money laundering charges for their role in a multi-million dollar high-yield investment fraud scheme that targeted elderly victims.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas and Inspector in Charge Delany DeLeon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group in Washington, D.C., made the announcement.
John Mervyn Price, 64, of Dallas, Texas, pleaded guilty today to one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud, 10 counts of wire fraud, and one count of money laundering, before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas. Price will be sentenced on Oct. 7, 2020, before U.S. District Court Judge Ed Kinkeade.
Cengiz Jan Comu, 59, of Dallas, Texas, pleaded guilty on March 10, 2020, to one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud, 10 counts of wire fraud, and two counts of money laundering, before U.S. Magistrate Judge Toliver. Comu’s sentencing is currently scheduled for July 8, 2020, before Judge Kinkeade.
As part of his guilty plea, Price, who had been EarthWater’s chief operating officer, admitted that, beginning in or about 2013 and continuing through on or about Sept. 30, 2016, he and Comu, who had been EarthWater’s chief executive officer, managed and supervised a scheme to defraud individuals by convincing them to invest in EarthWater under the false pretense that their investment would increase substantially in value in the immediate future. Price further admitted that, in truth and in fact, he and his co-conspirators knew that the proceeds of EarthWater stock sales were not invested in EarthWater as described to investors, but paid out to Price and his co-conspirators to be used for their personal benefit. Price also admitted that Comu lied to investors about being a successful Wall Street veteran and that Comu had, in fact, defrauded EarthWater investors by misusing investor funds for Comu’s personal benefit.
Price also admitted that he and Comu partnered with two stock promoters, Richard Laurence Kadish, 59, of Miami, Florida, and Richard Lawrence Green, 69, of Deerfield Beach, Florida, to sell EarthWater stock and that whenever Kadish, Green or a salesperson that Kadish or Green recruited, made a sale of EarthWater stock to a victim, Comu and Price paid Kadish and Green a commission of approximately 50 percent of the victim’s funds. Price further admitted that, starting in or about 2016, through in or about January 2019, Price also worked directly with another stock promoter, Russell Filippo, 69, of Oklahoma City, Oklahoma, to sell Price’s personal shares of EarthWater stock for approximately 30 percent commission. Price told Filippo that Comu lied about being a successful Wall Street veteran and that Comu had, in fact, defrauded EarthWater investors by misusing investor funds for Comu’s personal benefit. In addition, Price admitted he and Comu had engaged in monetary transactions in excess of $10,000 in funds obtained by defrauding investors through a company called Regus Advisors, Inc.
As part of his guilty plea, Comu similarly admitted that he conspired to obtain EarthWater investor funds through a scheme to defraud in which he made materially false and fraudulent misrepresentations to investors that the majority of their funds would be used to support EarthWater’s operations, when, in fact, the funds were used to pay undisclosed, excessive commissions to those selling EarthWater stock on Comu’s behalf. Comu further admitted that he knowingly engaged in monetary transactions in amounts greater than $10,000 involving investor funds obtained as part of the fraudulent scheme.
In addition to Price and Comu, Kadish, Green, Filippo, and six other defendants have been charged in the Northern District of Texas for their roles in the EarthWater fraud, including Harley E. “Buddy” Barnes, III, 61, of Plano, Texas; Daniel Thomas Broyles Sr., 63, formerly of Malibu, California; Suzanne Aileen Gagnier, 66, of Huntington Beach, California; Joe Edward Duchinsky, 65, of Alhambra, California; Joseph Lucien Duplain, 79, of Murrieta, California; and Donald Andrew Rothman, 72, of Coral Springs, Florida. All of these defendants, except for Kadish and Rothman, were charged by a federal grand jury in a superseding indictment unsealed on Nov. 8, 2019. Kadish was charged by a federal grand jury in an indictment filed on March 5, 2019, and Rothman was charged in an information filed on Sept. 6, 2019. Kadish, Green and Rothman have pleaded guilty and are scheduled to be sentenced on Nov. 18, 2020, before Judge Kinkeade. The remaining defendants are awaiting trial, which is currently set for Jan. 19, 2021, before Judge Kinkeade.
Barnes and Beth Ellen DeGroot, 59, of Plano, Texas, were separately charged by a federal grand jury in the Northern District of Texas with conspiracy to commit wire fraud and bank fraud and obstruction of justice relating to the ongoing investigation into EarthWater, in a superseding indictment returned on March 5, 2020. Barnes and DeGroot are awaiting trial, which is currently set for Oct. 5, 2020, before Judge Kinkeade.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Postal Inspection Service. Trial Attorneys Christopher Fenton and Amanda R. Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary F. Walters of the Northern District of Texas are prosecuting the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
[ad_2]
Source link