Woman Sentenced in Manhattan Federal Court in Water Park for Foster Kids Fraud
|U.S. Attorney’s Office June 17, 2014|
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that LILIANA TRAFFICANTE was sentenced this morning in Manhattan federal court by U.S. District Judge Deborah A. Batts to 41 months in prison for her leadership role in a five-year scheme to obtain money from investors by claiming that the money would be used for a project intended to help foster children, when in fact TRAFFICANTE spent much of the money on personal expenses and other purposes. TRAFFICANTE pled guilty to charges of conspiracy to commit wire fraud in September 2010, and agreed to pay restitution to the victims of her offense, pursuant to a plan to be set by the court.
Manhattan U.S. Attorney Preet Bharara said: “Instead of developing water parks for foster children as she said she would, Liliana Trafficante used the money to support her own lifestyle. In doing so, she exploited a worthy cause for personal gain, cheating foster kids out of an opportunity to truly benefit from the investors’ contributions.”
According to the charging documents in the case and statements made in open court today at the sentencing proceeding:
LILIANA TRAFFICANTE held herself out as the founder and Chief Executive Officer of International Dreams, a Manhattan-based entity. In addition, she is the principal of, or otherwise affiliated with, a number of entities that appear to be related to International Dreams, including GoOcean Park and Resort LLC, Bouchville Manors, The Little Water Park That Could, and Signature A (collectively, the “Trafficante Entities”). TRAFFICANTE claimed to be raising money for the purchase of land and completion of a water park for foster children (the “Water Park Project”). Among other methods, TRAFFICANTE raised money through postings on the Craigslist website. TRAFFICANTE made numerous false statements to individuals in order to induce them to make loans to and/or investments in the Trafficante Entities.
For example, according to the Complaint, TRAFFICANTE told one individual that land had been located for the Water Park Project. TRAFFICANTE claimed that the land was rich with natural resources, the exploration of which prior to construction could help fund the Water Park Project. Based on these representations, the individual loaned $100,000 to one of the Trafficante Entities. In connection with this loan, TRAFFICANTE and this individual executed a promissory note that stated that the “purpose” of the $100,000 loan was to help “GoOcean Water Park & Resort purchase excavating equipment.” In fact, no land had been purchased by TRAFFICANTE for a water park, or for any other purpose, and the money was not used for equipment of any kind. Rather, among other non-equipment payments, TRAFFICANTE made $40,000 in rent payments on behalf of family members the same day that the $100,000 was wired to an account she controlled.
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In addition to the prison term, Judge Batts sentenced TRAFFICANTE to three years of supervised release. TRAFFICANTE also was ordered to pay restitution of $750,000, as well as a $100 special assessment fee.
Mr. Bharara praised the work of the FBI, which investigated this case.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Eugene Ingoglia is in charge of the prosecution.
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