Three Fraud Defendants Who Met in Prison Sent Back to Serve New Sentences in $3.6 Million Ponzi Scheme
|U.S. Attorney’s Office April 30, 2013|
CHICAGO—Three serial fraud defendants who met while incarcerated for unrelated crimes at the federal prison in Oxford, Wisconsin, and then, after they were released, joined together in a Ponzi-type investment fraud scheme that caused approximately 100 victims to lose more than $3.6 million have been sentenced for their latest crimes. Two of the defendants purported to run a business, Sundown Entertainment Inc., that bought and sold films and comic-book rights and together raised more than $7 million from approximately 150 investors, while the third defendant entered the scheme later and lulled victims with false assurances about their investments.
U.S. District Court Judge Virginia Kendall last week sentenced Daniel Parrilli, 62, formerly of Carol Stream, to 70 months in prison, and finalized the sentencing of John Lauer, 48, formerly of Chicago, who received a 31-month prison term. The lead defendant, Christopher Andersen, 57, formerly of Downers Grove, was sentenced last fall to 95 months in prison. All three had pleaded guilty to fraud charges that were brought against them in 2010. Parrilli was ordered to pay more than $3.65 million in restitution and to begin serving his sentence on August 1. Lauer was ordered to pay $457,367 in restitution and to surrender on June 12. Andersen, who is serving his sentence, was ordered to pay restitution totaling more than $3.7 million.
In connection with Parrilli and Andersen’s sentencings, the government argued that the fraud scheme “had a terrible impact on victims, who in many cases depleted their 401k funds or their college savings or took out loans against their homes in order to invest with the defendants.”
Andersen had committed essentially the same crime previously when he was convicted in 2001 of offering and selling fraudulent investments in the form of promissory notes. He continued to engage in additional fraud schemes while the charges were pending in both cases and even after he pleaded guilty in the Sundown case. Parrilli had been imprisoned previously for bank fraud and fraudulently using aliases to obtain credit cards. When they teamed-up in the Sundown Entertainment fraud scheme, they promised investors returns starting at 10 percent to as much as 150 percent over a period of months to as short as a few days. Lauer joined Andersen and Parrilli after they had already fraudulently obtained most of the funds they raised from victims, and he provided lulling assurances to nervous victims that their investments were safe. Lauer also admitted engaging in a separate investment fraud scheme involving the purported purchase of a surety bond to obtain the release of bank funds from the Cayman Islands.
Lauer at one time was the director of risk management and benefits for the Chicago Housing Authority when he engaged in a fraud scheme involving the fraudulent offer and sale of investments in so-called prime bank instruments that resulted in losses of more than $20 million, including about $15 million in CHA pension funds. Lauer admitted engaging in multiple, separate fraud schemes and met Andersen and Parrilli while all three were serving their sentences at the Oxford prison. Lauer was on supervised release when he assisted them in the later stages of the Sundown Ponzi scheme.
The sentences were announced by Gary S. Shapiro, United States Attorney for the Northern District of Illinois, and Cory B. Nelson, Special Agent in Charge of the Chicago Office of the Federal Bureau of Investigation. The U.S. Securities and Exchange Commission assisted in the investigation.
The government was represented by Assistant U.S. Attorneys Edward Kohler and Shoshana Gillers.
The investigation falls under the umbrella of the Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch and, with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes. For more information on the task force, visit stopfraud.gov.