Three Players in $10 Million Investment Fraud Ring Sentenced to Prison
|U.S. Attorney’s Office August 18, 2010|
NEWARK, NJ—Three members of an investment fraud ring were sentenced today for their roles in defrauding investors out of more than $10 million and laundering the proceeds of their fraud, United States Attorney Paul J. Fishman announced.
United States District Judge Dennis M. Cavanaugh sentenced Radcliffe Bent to 110 months in prison, and Michael Berteletti and Alexander Klepach each to 60 months in prison this morning in Newark federal court.
According to documents filed and statements made in court:
Bent, 43, of Franklin Park, New Jersey, was the chief operating officer and sole owner of Covenant Consulting Company (“Covenant”) and controlled several bank accounts in the name of the company. Covenant, a New York corporation primarily based in Franklin Park, was purportedly in the business of consulting and venture capitalism, but was actually a shell corporation with no legitimate business operations.
Berteletti, 45, of Brooklyn, New York, was a licensed stock broker with the National Association of Securities Dealers (“NASD”), now known as the Financial Industry Regulatory Authority, Inc., (“FINRA”), who worked for various broker-dealer firms and solicited investors for Covenant. During the course of the conspiracy, Berteletti was a manager and beneficial owner of Cambridge, and also served as a stock promoter for SavvyData, Inc. (“SavvyData”), a now-defunct privately-held corporation based in Florida. Bent also promoted SavvyData stock. Bent incorporated Covenant despite having previously been barred by NASD from selling securities to investors as a registered representative. Bent and his co-conspirators induced investors to purchase shares of stock and promissory notes in Covenant and two other shell companies, Cambridge Berkshire Group (“Cambridge”)—of which Bent was also a manager and beneficial owner—and Crown Estates Development Corporation (“Crown Estates”). The conspirators also induced investors to purchase shares in SavvyData, which Bent and Berteletti represented to investors would be brought public. Over the course of the 10-year conspiracy spanning from September 1997 to July 2007, Bent and his co-conspirators stole millions of dollars from dozens of victims by making false statements and failing to disclose material information.
Klepach, 42, of Brooklyn, New York, generated large sums of cash as proceeds of his illegal drug distribution business. In an effort to conceal their fraud, Bent, Berteletti and others conspired with Klepach to launder the proceeds of the fraud by transferring investor funds to bank accounts controlled by co-conspirators who obtained cash from other co-conspirators, including Klepach. Klepach gave Bent, Berteletti, and others cash in exchange for wire transfers and checks constituting Covenant investor proceeds.
On May 19, 2009, Bent pleaded guilty to three counts of a superseding Indictment: conspiracy to commit mail and wire fraud (Count One); conspiracy to commit money laundering (Count Five); and tax evasion (Count Nine). At the plea hearing before Judge Cavanaugh, Bent admitted that he made false statements and failed to disclose material information to investors with respect to their investments in Covenant, SavvyData, Crown Estates and Cambridge. He also admitted that he misappropriated investor money for his personal benefit and for the benefit of his co-conspirators. Bent also stated that he engaged in a conspiracy to launder money, the object of which was to obtain cash from individuals in exchange for proceeds of the Covenant fraud.
With respect to Count Nine of the Superseding Indictment, Bent admitted that during calendar year 2003, he received approximately $1 million in taxable income upon which he owed a tax of approximately $369,000. During the plea colloquy, Bent conceded that he willfully failed to report the $1 million in taxable income he received from investors when he filed his false and fraudulent 2003 personal income tax return.
On May 6, 2009, Klepach pleaded guilty to an Information charging him with money laundering conspiracy. Berteletti pleaded guilty to one count of mail and wire fraud conspiracy and one count of money laundering conspiracy charged in a separate, superseding Information on May 27, 2009.
In addition to the prison terms, Judge Cavanaugh ordered all three defendants to serve three years of supervised release. Judge Cavanaugh also ordered Bent to pay $7,399,396.57 and Berteletti to pay $10,264,396.57 in restitution.
Klepach’s sentence will run concurrently with an 78-month sentence he is currently serving on federal narcotics charges in the Eastern District of New York.
Three other co-conspirators have pleaded guilty in connection to the fraud and await sentencing. On May 6, 2009, Jack Kadymir pleaded guilty to an Information charging him with conspiracy to commit mail and wire fraud. On May 19, 2009, Rodney Kadymir pleaded guilty to an Information charging him with one count each of conspiracy to commit mail and wire fraud and conspiracy to commit money laundering. On September 8, 2009, Viktoria Fesenko pleaded guilty to a superseding Information charging her with misprision of a felony for concealing the fraud.
U.S. Attorney Fishman credited special agents of the Internal Revenue Service in Springfield, New Jersey, under the direction of Special Agent in Charge Victor W. Lessoff; special agents of the Federal Bureau of Investigation, under the direction of Michael B. Ward in Newark; and postal inspectors of the United States Postal Inspection Service, under the direction of Postal Inspector in Charge David Collins in Newark with the work leading to today’s sentences.
The government is represented by Assistant United States Attorney Stacey A. Levine of the U.S. Attorney’s Office Criminal Division in Newark.
Radcliffe Bent: William J. Hunt, Esq., Hackensack, N.J.
Michael Berteletti: Michael V. Gilberti, Esq., Red Bank, N.J.
Alexander Klepach: John S. Wallenstein, Esq., Garden City, N.J.