U.S. Prosecutors and Australian Authorities Collaborate to Recover More Than $24 Million from Fraudulent e-Bullion Website
|U.S. Attorney’s Office August 01, 2012|
LOS ANGELES—The United States and Australia have secured court orders in asset forfeiture actions that will lead to millions of dollars being repaid to victims who made investments or deposits with e-Bullion.com, a website that federal prosecutors contend operated for years as an illegal money-transmitting business.
e-Bullion was operated by James Fayed, who is currently on California’s death row in relation to a separate investigation that led to him being convicted in state court of contracting with hitmen who murdered his wife.
The domestic litigation in the civil action ended on Monday, July 30, when United States District Judge Philip S. Gutierrez signed a forfeiture judgment awarding to the United States approximately $3.6 million in bank funds and $5.4 million worth of gold, silver, and platinum previously seized by the United States government. The conclusion of the case was prompted by two entities formerly controlled by Fayed—Goldfinger Coin and Bullion (GCB) and Goldfinger Bullion Reserve Corp (GBRC)—withdrawing their claims to the assets.
In the Australian litigation, which was finalized on July 23 by a judge in Perth, GCB, GBRC, James Fayed, and the Estate of the murdered Pamela Fayed agreed to the forfeiture of approximately $13.3 million obtained when precious metals held by Fayed were liquidated. The United States continues to work with Australia to repatriate the funds forfeited in Australia so that the United States can commence efforts to compensate the innocent investors and depositors who put their money into e-Bullion.
e-Bullion purported to provide opportunities to invest in precious metals. Through the website, individuals opened accounts with real money, which they used to purchase virtual “e-currency” purportedly backed by precious metal reserves maintained by Fayed’s companies in the United States and Australia. e-Bullion accountholders could then trade their e-currency with others on the website. While there were no fees associated with establishing or funding an account on the e-Bullion website, there were fees associated with changing e-currency back into real money.
In practice, e-Bullion allowed individuals engaging in fraud to obtain money from victims and move the money around the world while remaining virtually anonymous and avoiding many global banking reporting requirements. An investigation into e-Bullion and GCB by the FBI and IRS-Criminal Investigation revealed that operators of fraudulent “High-Yield Investment Programs” and other illegal investment schemes used e-Bullion to collect millions of dollars of e-currency from victims, much of which was wire transferred by GCB to overseas accounts. The U.S. government’s asset forfeiture case alleged that Fayed and his companies not only allowed these illegal schemes to use e-Bullion to operate—collecting substantial fees when the fraudsters cashed out—but also profited by retaining monies abandoned by fraudsters who believed they were under investigation by law enforcement or were about to be caught.
During the course of the criminal investigation into e-Bullion, Fayed hired hitmen to murder his wife and business partner, Pamela Fayed. James Fayed subsequently was prosecuted by the Los Angeles County District Attorney’s Office and sentenced to death following the separate investigation by local authorities.
During the course of the criminal investigation into e-Bullion and the subsequent asset forfeiture litigation, the United States was able to obtain information from e-Bullion’s and GCB’s encrypted computer servers in California and Switzerland, which the government believes will accurately identify e-Bullion accountholders and the value of their individual accounts. The United States Department of Justice intends to distribute the recovered funds to the innocent accountholders through a process known as “remission,” which allows the government to use forfeited money to compensate domestic and international victims of crime.
This matter was successfully resolved with the substantial assistance provided by Australian authorities including the Australian Federal Police, Attorney General’s Department, and Commonwealth Director of Public Prosecutions. Prosecutors in the United States and Australian authorities worked closely together over the course of the litigation to recover a total of approximately $24 million in assets.
The $24 million figure includes $1.8 million the United States government previously forfeited after tracing the funds to a fraudulent scheme that operated through e-Bullion. The U.S. Department of Justice has already started the remission process related to those forfeited funds (see: http://www.kvremission.com/).
e-Bullion accountholders who wish to be considered for remission may submit claims—which should include copies of supporting account documentation—via e-mail to: email@example.com. e-Bullion accountholders may also submit claims via mail to:
United States Attorney’s Office
Asset Forfeiture Section
ATTN: e-Bullion Remission
312 North Spring Street,
Los Angeles, CA 90012.