Assistant United States Attorney Michael M. Beckwith is prosecuting the case. This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General, Office of Investigations. Instead, Rocco was accused of operating a Ponzi scheme that used investor funds to pay returns. Finally, the toll on the criminal justice system is also noteworthy. SACRAMENTO, Calif. Deepal Wannakuwatte, 63, of Sacramento, was charged today in a three-count indictment returned today with bank fraud and making false statements to a financial institution, United States Attorney Benjamin B. Wagner announced. He falsely claimed that his companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. In fact, there were no such invoices, and no such debt was owed by the VA to IMG. Prosecutors say Wannakuwatte conned his victims into investing in a West Sacramento medical supply company whose revenue was just a fraction of what he claimed. - And if you think youve been scammed, report it to the Securities and Exchange Commission, your states securities regulator, or a law enforcement agency. 501 I Street, Suite 10-100 While tracing its origin back at least 80 years, the past decade has been unprecedented in terms of the number and severity of Ponzi schemes. ) or https:// means youve safely connected to the .gov website. The victims will never be whole again from the fraud totaling more than $230 million, but rest assured they will have the comfort of knowing Wannakuwatte will be incarcerated for many years to come. For more than decade, up until February 2014, Sacramento businessman (and Ponzi scammer extraordinaire) Deepal Wannakuwatte fooled his investors and his lenders into believing that he and his companies were worthy of their trust and their money. Indeed, while Madoff involved several thousand investors, the court-appointed receiver in ZeekRewards announced that he had received proof of claim forms from over 174,000 victims. Rocco was formerly the president of the Dix Hills Soccer Club, where he enjoyed exclusive access to company bank accounts. Defendant requests the Court reduce his term of imprisonment due to the COVID-19 pandemic. (ECF No. A Toronto pastor and his wife were accused of defrauding more than 200 parishioners out of nearly $9 million under the ruse that they were generating above-average returns through dabbling in foreign-currency trading. Defendant cites the conditions of his confinement at USP Lompoc as an additional factor in his vulnerability. Persaud was able to raise at least $1 million from investors. Professional and Commercial Equipment and Supplies Merchant Wholesalers Merchant Wholesalers, Durable Goods Wholesale Trade Printer Friendly View Address: 879 F St Ste 120 West Sacramento, CA, 95605-2384 United States Phone: ? In truth, the government contracts were worth only $25,000. Authorities also filed criminal charges against financial juggernaut JPMorgan Chase (JPM), accusing the bank of turning a blind eye to Madoffs scheme while serving as his primary banker. In early February, he announced he was moving the team to Las Vegas because he couldnt secure a permanent home stadium for the Capitals in Sacramento. (ECF No. Three men were sent back to federal prison after they concocted a Ponzi scheme in prison that promised lucrative returns through the distribution of comic book rights. Theres no way I can make the victims whole, Nunley said. Troy L. Nunley United States District Judge, This matter is before the Court on Defendant Deepal Wannakuwatte's ("Defendant") Motion for Compassionate Release Pursuant to 18 U.S.C. SACRAMENTO, CAOn Thursday, a federal judge ordered Deepal Wannakuwatte, 64, of Sacramento, to pay $108,199,425 in restitution to victims of his long-running fraud scheme, United States Attorney Benjamin B. Wagner announced today. Losses incurred by the victim financial institutions often threatened their financial stability and reputations. (ECF No. The legitimate part of IMG had been losing money for years, and Wannakuwatte used some of the proceeds of his Ponzi scheme to keep the company afloat. In 2014, the 63-year-old Wannakuwatte was sentenced to 20 years in jail. He is a shadow of the man. /content/aba-cms-dotorg/en/groups/litigation/committees/criminal/practice/2015/sacramento-capitols-former-owner-ordered-to-pay-restitution-in-ponzi-scheme. From behind cars, Deepal Wannakuwatte tries to convince his own mother his sentencing isn't nearly as bad as it sounds. In the early 20th century, a little-known Italian immigrant gained international notoriety after his investment venture promising astronomical returns through the resale of postal reply coupons was proved to be mathematically impossible. His plea followed weeks of negotiations between his lawyer and federal prosecutors. In his highprofile pursuit for prestige and financial gain, Wannakuwatte had no regard for public trust and the financial stability of his victims, said Special Agent in Charge Monica M. Miller of the Sacramento Division of the Federal Bureau of Investigation. - Be extremely cautious about unsolicited offers to invest. Deepal Wannakuwatte, the former owner of the now-defunct Sacramento Capitals professional tennis team, was sentenced to 20 years in prison Thursday for perpetrating one of the costliest Ponzi schemes in the regions history. The case against Deepal Wannakuwatte was already one for the books: a successful immigrant businessman, owner of a professional tennis team, admitting he had perpetrated one of the largest Ponzi. Ironically, Steven Palladino was also accused of using investor funds to make court-ordered payments stemming from a previous conviction for defrauding an elderly relative. According to court documents, from 2002 to 2014, Wannakuwatte convinced nearly 200 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Robert Rocco, 48, was indicted in 2013 on multiple federal fraud charges that could land him behind bars for decades. It is also encouraging that Defendant recovered without any documented complications. A New York man was accused of using his position as head of a soccer club to dupe investors out of more than $5 million in a Ponzi scheme that purportedly financed the sale of cigarettes to a Native American Indian reservation. Compare with Westlaw Troy L. Nunley United States District Judge ORDER This matter is before the Court on Defendant Deepal Wannakuwatte's ("Defendant") Motion for Compassionate Release Pursuant to 18 U.S.C. Investors are promised above-average returns that generally carry little risk. In opposition, the Government argues the Court should deny Defendant's motion because Defendant failed to demonstrate extraordinary and compelling reasons to warrant release, he is a continuing danger to the community, and the 18 U.S.C. 3582(c)(1)(A) and U.S.S.G. A thief, a serial thief.. There, the judge said, Deepal, you are a sociopath. 1343. Experts said it would have been difficult for Wannakuwatte to withdraw his guilty plea, and his new lawyer, Cozens, announced to the court in September that his client was ready to be sentenced. Nunley was unsparing as well, calling Wannakuwatte a liar and adding: Youre an evil person, theres no way you can get around that.. Share sensitive information only on official, secure websites. (Id.) 20.) Share sensitive information only on official, secure websites. SACRAMENTO, Calif. Deepal Wannakuwatte, 63, of Sacramento, was sentenced today to 20 years in prison for a long-running fraud scheme, announced United States Attorney Benjamin B. Wagner, Special Agent in Charge Monica M. Miller of the FBI's Sacramento Field Office, Acting Special Agent in Charge Thomas McMahon for the IRS-Criminal When you realize the case has problems from the defense side, you want to recognize those problems early on, Heller said after the court hearing. After the arrest, the franchise was disbanded by World TeamTennis. One Florida man went a bit too far in relying on the heavens for riches. Wannakuwatte was sentenced to 20 years in prison after an emotional sentencing hearing on November 13, 2014. There is no amount of time I can sentence you to that would appease your victims., This sentence brings to an end to one of the longest running, most extensive, and most damaging fraud schemes our region has ever seen, said U.S. Attorney Wagner. A hearing has been set for Jan. 15 to sort out the discrepancy. RelyAid did have one contract with the Department but it was worth only $25,000. Jul. Wannakuwatte ran a Ponzi scheme in California through his company, International Manufacturing Groupone where money from new investors goes to interest payments from older investorsfor nearly a decade before the scam imploded in 2014. Joseph Signore, his wife Laura Signore, Paul Schumack and Craig Allen Hipp were recently arrested on multiple fraud charges stemming from their roles in JCS Enterprises. Gurus Emu-Raising Ponzi Scheme. I want to commend the FBI and IRS-CI for detecting and swiftly stopping this scheme before it caused even greater losses., Wanakuwattes victims individuals, businesses, government agencies, venture funds, and financial institutions suffered as his elaborate scheme collapsed. An official website of the United States government. Article printed from InvestorPlace Media, https://investorplace.com/2014/05/cheated-ponzi-schemes-bernie-madoff/. Wannakuwatte, who turns 64 next week, has been in jail since February on charges of taking banks and individual investors for more than $100 million. Persaud solicited investors by promising risk-free annual returns ranging from 6% to 18%, telling them he was able to generate such gains through trading in futures and other markets. Share sensitive information only on official, secure websites. GDC Stock Alert: Why Is GD Culture Group Up 700% Today? (David Becker/Las Vegas Review-Journal File) | Las Vegas Review-Journal. 00:43. 3582(c); see Dillon v. United States, 560 U.S. 817, 824-25 (2010). This ruling concludes the federal criminal prosecution; civil proceedings in the United States Bankruptcy Court are ongoing. Additionally, Hibbert and his wife diverted investor funds for their own personal use, including the purchase of luxury automobiles and real estate. Susi Emu Farms took on the obligation of raising the emu, and investors were told that the returns were possible because of the alleged value in emu meat and oil. The rebranded Las Vegas Neon went defunct almost immediately after his arrest. Secure .gov websites use HTTPS Deepal Wannakuwatte, owner of the Las Vegas Neon, was arrested Thursday in Sacramento, Calif., on federal fraud charges. SACRAMENTO, CAOn Thursday, a federal judge ordered Deepal Wannakuwatte, 64, of Sacramento, to pay $108,199,425 in restitution to victims of his long-running fraud scheme, United States Attorney. He was ordered by a federal judge last month to pay millions in restitution to his victims, FBI.gov is an official site of the U.S. Department of Justice. One of the properties Wannakuwatte hasnt yet surrendered is his West Sacramento medical company, whose assets were frozen after a group of investors sued. Horacio Ortega-Martinez, 36, a citizen of Mexico residing in Bakersfield, was sentenced today to 18 months in prison for possessing roosters for the purpose of using them in an animal A Bakersfield man was sentenced today to an additional month in prison to be followed by 11 months home detention and 36 months of supervised release for knowingly aiming the Federal agent pleaded guilty Wednesday to one count of making a false statement in connection with a sexual relationship she had with a victim witness in a separate federal criminal Sacramento Main Office Wannakuwatte claimed he had already paid back some of the victims, but the court determined that he had not met his burden of showing this to the court. 3582(c)(1)(A) (requiring a consideration of the 3553(a) factors before granting compassionate release). See U.S.S.G. Wannakuwatte was supposed to be sentenced Aug. 7. Charles Ponzi would eventually serve nearly two decades in federal and state prison for that and related scams, but little did he know that his surname would one day epitomize one of the most potent weapons of financial destruction ever encountered. However, according to authorities, these claims were false. Kamir Abou Najm performed research work for the universitys Miller Lab, which studies early signs of autism and ADHD. Defendant did not file a reply. Even after the trio accepted guilty pleas from state prosecutors, Steven Palladino recently landed in more trouble when federal prosecutors indicted him on 25 charges of criminal contempt. On November 13, 2014, United States District Judge Troy L. Nunley sentenced Wannakuwatte to 20 years in prison and ordered him to forfeit multiple properties, vehicles, business interests, and bank accounts totaling at least $3.5 million to be used to provide restitution to victims. Wannakuwatte will be sentenced July 24 by U.S. District Judge Troy Nunley. In fact, while he did have a contract with the VA, it was only worth up to $25,000 a year. Defendant is currently serving his sentence at USP Lompoc. (Id. This case should serve as a warning to those thinking of committing fraud., FDIC OIG Special Agent in Charge Wade V. Walters stated, The sentencing of Mr. Wannakuwatte today reflects fitting punishment for a fraud scheme that victimized so many trusting individuals, businesses, government agencies, financial institutions, and others. The case is tied to his medical-supply business, International Manufacturing Group. Wannakuwatte was born in Sri Lanka and moved to Georgia to play tennis in college. watch now. A locked padlock They all painted a picture of a man who preyed on mostly elderly investors and duped many of them out of their retirement savings. The victims will never be whole again from the fraud totaling more than $230 million, but rest assured they will have the comfort of knowing Wannakuwatte will be incarcerated for many years to come. Coincidentally, a related company funded with investor funds was, until recently, the beneficiary of an investment by Barbara Corcoran a star of CNBCs hit show Shark Tank. When incoming investor funds were not enough to sustain the growing obligations to existing investors, the scheme collapsed and Susi Emu Farm executives fled town. A North Carolina company known as ZeekRewards, or Zeekler, solicited investors worldwide to participate in its penny-auction business where participants could bid on popular merchandise in 1-cent increments. The letter was read aloud by Assistant U.S. Attorney Kevin Khasigian. WASHINGTONDeepal Wannakuwatte, 63, of Sacramento, California, was sentenced today to 20 years in prison for a long-running fraud scheme, announced United States Attorney Benjamin B. Wagner,. (ECF No. At times, Wanakuwatte set up fake conference calls between himself, a potential investor, and someone he falsely claimed was a VA representative. Although the government has initiated proceedings to seize his home in South Land Park, vacation properties in Hawaii and on the Oregon coast, and other assets, its considered unlikely that victims will receive more than pennies on the dollar. In a series of lawsuits in U.S. Bankruptcy Court, trustee Beverly McFarland has sued several victims of disgraced tennis-team owner Deepal Wannakuwatte, who was sentenced to 20 years in prison. The impact on the victims in this case was often devastating. An official website of the United States government. Defendant made a request to the warden on April 23, 2020. Cal. UNITED STATES OF AMERICA, Plaintiff, v. DEEPAL WANNAKUWATTE, Defendant. Mar. The total losses to investor victims exceeds $100 million. He also serves as the editor and founder of Ponzitracker, an Internet blog that tracks the proliferation of Ponzi schemes across the United States. SACRAMENTO, Calif. Deepal Wannakuwatte, 63, of Sacramento, was sentenced today to 20 years in prison for a long-running fraud scheme, announced United States Attorney Benjamin B. Wagner, Special Agent in Charge Monica M. Miller of the FBIs Sacramento Field Office, Acting Special Agent in Charge Thomas McMahon for the IRS-Criminal Investigation, and Special Agent in Charge Wade V. Walters of the Federal Deposit Insurance Corporation Office of Inspector General. Yet, instead of informing investors of the situation, Sundown continued to solicit new investments. The exposure was gigantic, Heller said. SACRAMENTO, Calif. Deepal Wannakuwatte, 63, of Sacramento, was charged today in a three-count indictment returned today with bank fraud and making false statements to a financial institution, United States Attorney Benjamin B. Wagner announced. Contrary to his representations, Wannakuwatte used much of the money he obtained to pay himself and his family, make lulling payments to participants in his fraudulent investment schemes, and pay outstanding debts unrelated to his false representations. . According to the indictment, beginning in September 2011, Wannakuwatte sought a line of credit from Bridge Bank. Michael Hooper, a Carmichael man who lost more than $200,000, recalled how Wannakuwatte ingratiated himself with his victims. Wannakuwatte ran a Ponzi scheme in California through his company, International Manufacturing Groupone where money from new investors goes to interest payments from older investorsfor nearly a decade before the scam imploded in 2014. You are a liar, a serial liar. Real-time updates and all local stories you want right in the palm of your hand. . Ultimately, Wannakuwatte obtained well over $230 million from his victims. But he walked into court that day and announced that hed fired his original lawyer, Donald Heller, claiming that Heller had coerced him into pleading guilty. No Thanks Under his original indictment, Wannakuwatte could have received up to 90 years in prison. On November 13, 2014, this Court sentenced Defendant to a 240-month term of imprisonment followed by a 36-month term of supervised release. To date, Madoffs victims have recovered nearly 50% of their losses through the trustees efforts, and this number is expected to increase. U.S. observes National Crime Victims Rights weekpromoting victims rights and honoring crime victims and those who advocate on their behalf. Share on Twitter Twitter Wannakuwattes decadelong crime constitutes very possibly the largest Ponzi scheme in the regions history, Wagner said. In total, Sundown raised more than $7 million from over 150 investors. Investor funds were diverted for a variety of unauthorized purposes, including trips to the Bahamas, hundreds of thousands of dollars in gambling losses, and even the payment of rent for Steven Palladinos mistress. SACRAMENTO, Calif. Deepal Wannakuwatte, 63, of Sacramento, pleaded guilty today to one count of wire fraud in furtherance of a long-running and large-scale fraud scheme, announced United States Attorney Benjamin B. Wagner, Special Agent in Charge Monica M. Miller of the FBI's Sacramento Field Office, Jose M. Martinez Special Agent in Charge for Sacramento, CA. Based on these representations, IMG and RelyAid raised at least $125 million from numerous investors. Fax Line:(916) 554-2900. He will also surrender $8 million to $12 million worth of federal income tax refunds. Next: M.S. The agony of his victims, however, continues. In order to establish his financial credibility, Wannakuwatte showed investors his personal and corporate tax returns where he actually reported and paid taxes that falsely overstated his annual personal income and the annual gross receipts and sales for IMG. Deepal Wannakuwatte, the former professional tennis team owner who ran one of the biggest Ponzi schemes in Sacramento history, has been ordered to repay his victims $108.2 million. Defendant Deepal Wannakuwatte has pleaded guilty to running a massive Ponzi scheme and agreed to forfeit various assets connected to that fraud scheme, including sixteen real properties, four vehicles, twenty-one bank accounts, three life insurance policies, seven checks/money orders and two partnership interests. The loss has devastated him, according to a letter from his wife, Jayna. As an aside, IMG actually had been in business for more than 25 years and actually did sell gloves and other supplies to businesses, including medical providers. 5 Hypergrowth Stocks With 10X Potential in 2023, purchase $200,000 in emergency rations to feed the emus, a $3 million private plane that had been pledged as collateral., beneficiary of an investment by Barbara Corcoran, Penny Stocks How to Profit Without Getting Scammed, When Fraud Bites Business: Lost Fortunes, Reputations and Lives, 3 Big Ways That Medicare Fraudsters Rip You Off, Even if Block Beats on Earnings, Stay Away From SQ Stock, Louis Navellier and the InvestorPlace Research Staff, Rare Stock Indicators Show the Market Is About to Skyrocket, Ideanomics (IDEX) Stock Surges 90% Ahead of Possible Delisting, MULN Stock Alert: UNC Charlotte Orders Mullen Vans. However, relief under 18 U.S.C. Deepal Wannakuwatte - Bio, News, Photos - Washington Times To work, or not, on the Sabbath Gerald Groff shares his story with Alex New Episode: American sovereignty is in peril Frank Gaffney. A .gov website belongs to an official government organization in the United States. Dressed in a grubby jail-issued orange jumpsuit, Wannakuwatte, 63, pleaded guilty Thursday to a single count of wire fraud in U.S. District Court. For individual investors, Wanakuwatte had encouraged them to obtain their investment money from the equity in their homes or from their retirement accountsas a result, many lost everything. 135.) While the forfeitures will go toward restitution, the remainder of the roughly $105,000,000 will be paid back at a minimum rate of a mere $25.00 per quarter during the course of his incarceration. Later, Wannakuwatte stood silently as defense attorney Philip Cozens read a letter from his client in which Wannakuwatte apologized to his victims and said he had shamed his family and his Sri Lankan roots. In 2013, Wannakuwatte claimed to have more than $125 million in VA contracts alone. Share on Twitter Twitter Police see link to similar incidents. . Real-time updates and all local stories you want right in the palm of your hand. Many of the victims will never be made whole, Wagner said. Marlon Gary Hibbert and Verna Hibbert were charged with 38 criminal counts in mid-2013 by Toronto police, who alleged that the pair lived a luxurious lifestyle by misappropriating investor funds. 135.) But prosecutor Michael Beckwith had called the evidence overwhelming, and defense attorney Donald Heller said it was clear almost from the start that a plea bargain made more sense than a trial. One spoke about having to delay retirement and sell his house to make ends meet. More specifically, the "extraordinary and compelling" requirement is met where a defendant is: (i) suffering from a terminal illness; or (ii) suffering from a serious physical or medical condition, serious functional or cognitive impairment, or deteriorating physical or mental health because of the aging process, "that substantially diminishes the ability of the defendant to provide self-care within the environment of a correctional facility and from which he or she is not expected to recover." 501 I Street, Suite 10-100 Share on Facebook Facebook However, in August 2012, the Securities and Exchange Commission initiated an emergency civil enforcement action and accused ZeekRewards and its founder, Paul Burks, of masterminding a massive Ponzi scheme that was on the verge of collapse. 3582 (C) (1) (A) (i). 3582(c)(1)(A) is only available. From Bernie Madoff to bogus emu investments, these 10 Ponzi schemes turned heads with their big sums and odd natures. All rights reserved. Deepal Wannakuwatte seemed prepared, barely a week ago, to accept a lengthy prison term for orchestrating one of the biggest Ponzi schemes in Sacramento history. Even when excluding the three largest Ponzi schemes, the average scheme size was still $43.3 million. In order to establish his financial credibility, Wannakuwatte showed investors his personal and corporate tax returns where he actually reported and paid taxes that falsely overstated his annual personal income and the annual gross receipts and sales for IMG. Next: A Virtual Concierge Ponzi Scheme With A Shark Tank Link. An investigation began after a tip from an investor in 2013 and involved a joint investigation by the Federal Bureau of Investigation, the Internal Revenue Service, and the Federal Deposit Insurance Corporation, Office of the Inspector General. He falsely claimed that these companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. In total, the venture raised over $10 million from at least 40 investors. Nasdaq Wannakuwattes companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. Call The Bees Dale Kasler, (916) 321-1066. The Court acknowledges USP Lompoc has had one of the worst COVID-19 outbreaks of any federal prison. In that position, Rocco solicited club members to invest in his company, Limestone Capital Services, which they were told provided wholesale financing of cigarette purchases for a tobacco shop located on the Shinnecock Native American Reservation. 138 at 9-15. In fact, while he did have a contract with the VA, it was only worth up to $25,000 a year. 2:14-cr-00067-TLN (E.D. Well take a look at these, but first, a look at the staggering stats behind Ponzi schemes. A .gov website belongs to an official government organization in the United States. At Wannakuwattes direction, the IMG employee pretended to be a VA representative. Five of these schemes have raised at least $1 billion from investors, and Bernie Madoffs scheme is recognized as the worst Ponzi scheme in history. And while Wanakuwatte made payments to some of the earlier investors as a way of pacifying them, eventually the scam began to implode as more investors and lenders wanted what was owed them and Wanakuwatte couldnt make the payments. The cities are Baton Rouge LA, Carson City NV, Chicago IL, El Dorado Hills CA, Phoenix AZ, Sacramento CA, Seattle WA, Sequim WA, W Sacramento CA, and West Sacramento CA. Among his victims were banks, an Indian tribe in Washington state, as well as roughly 150 individuals. 1B1.13(2) (requiring a defendant to demonstrate that he is "not a danger to the safety of any other person or to the community"); see also 18 U.S.C. A lock ( Assistant United States Attorneys Michael M. Beckwith and Kevin C. Khasigian prosecuted the case. Deepal Wannakuwatte and Betsy are not now, and never have been, members or owners of Sunfire. Upon receiving funds, Wannakuwatte used the money to pay outstanding debts unrelated to the purpose of the loan. Assistant United States Attorneys Michael Beckwith and Kevin Khasigian are prosecuting the case. See 18 U.S.C. Neither agreed to talk to The Bee afterward. After their release from prison, the trio formed Sundown Entertainment Inc. (Sundown), which purported to specialize in the distribution of film and comic-book rights.

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