Financial Fraud Enforcement Task Force Announces Regional Results of Operation Broken Trust, Targeting Investment Fraud
|U.S. Attorney’s Office December 06, 2010|
SAN FRANCISCO—Following an announcement today by Attorney General Eric Holder in Washington, D.C., representatives of the Financial Fraud Enforcement Task Force in the Northern District of California, including U.S. Attorney Melinda Haag and Federal Bureau of Investigation Special-Agent-in-Charge Stephanie Douglas, announced the regional results of Operation Broken Trust, a nationwide operation that targeted investment fraud in the Northern District of California and throughout the country. Operation Broken Trust is the first nationwide operation of its kind to target a broad array of investment fraud schemes that directly prey upon the investing public.
The interagency Financial Fraud Enforcement Task Force was established by the president to lead an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. Starting on Aug. 16, 2010, to date Operation Broken Trust has involved enforcement actions against 343 criminal defendants and 189 civil defendants for fraud schemes involving more than 120,000 victims throughout the country. The operation’s criminal cases involved more than $8.3 billion in estimated losses and the civil cases involved estimated losses of more than $2.1 billion. In the Northern District of California, five defendants have been charged with financial crimes in three cases that have been filed as a part of this operation. Those defendants are alleged to be responsible for more than $33.5 million in losses.
“My office takes financial fraud seriously,” U.S. Attorney Haag said. “Together with our law enforcement partners, we have created an effective means to catch the perpetrators of these crimes. Once caught, they will be prosecuted to the fullest extent of the law.”
“With this operation, the Financial Fraud Enforcement Task Force is sending a strong message,” said Attorney General Holder. “To the public: be alert for these frauds, take appropriate measures to protect yourself, and report such schemes to proper authorities when they occur. And to anyone operating or attempting to operate an investment scam: cheating investors out of their earnings and savings is no longer a safe business plan—we will use every tool at our disposal to find you, to stop you, and to bring you to justice.”
“Our financial system depends on the honesty, transparency, and fairness of all participants,” said FBI Special Agent in Charge Stephanie Douglas. “When people take advantage of the public’s trust to enrich themselves, they are not only harming their victims, they are damaging the very foundation of our economy. As part of the president’s financial fraud enforcement task force, the FBI in the Bay area remains committed to pursuing those involved in fraud schemes and bringing them to justice.”
The president’s Financial Fraud Enforcement Task Force 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.
Operation Broken Trust cases in the Northern District of California include:
United States vs. Nicole Song
Case #: CR 09-1214 JSW
Nicole Song (a/k/a Paris Samantha Song) was sentenced on Sept. 16 to seven years in prison and ordered to pay $1,645,789.23 in restitution for her fraud and identity theft scheme. Song, 32, most recently of Las Vegas, pleaded guilty to charges of wire fraud, bank fraud, and aggravated identity theft. According to the plea agreement, Song admitted that she abused her position as the financial and real estate advisor for her victim by using the proceeds of multiple real estate refinancings for her own personal benefit. Song also admitted forging her victim’s signature on one loan application, and using her victim’s Social Security Number to obtain numerous fraudulent loans and credit cards. Song agreed at sentencing that the loss to the individual victim exceeded $1.5 million, and that the losses to various banks exceeded $140,000.
United States vs. Maher Muhawieh
Case #: CR 10-678 CRB
Maher Talal Muhawieh was charged on Sept. 17 for perpetrating a Ponzi scheme over the course of almost three years. According to the Indictment, Muhawieh, 31, of San Francisco, told potential victims various lies to get them to lend him money. For example, Muhawieh represented to victims that their funds would be used to purchase and to renovate specific residential properties in San Francisco that would then be sold at a profit. Muhawieh claimed he would make regular and high rates of return for the lenders with limited risk. Muhawieh also represented to victims that their funds were secured by deeds of trust on the residential properties that he represented would be purchased and renovated with the lenders’ funds. According to court documents, Muhawieh allegedly took in more than $25 million from a total of at least 80 victims.
United States vs. Barbara Alexander, Beth Pina, and Michael Swanson
Case #: CR 10-00730-JF
A federal grand jury in San Jose indicted Barbra Alexander, of Monterey, Calif., Beth Pina, of Fairfield, Idaho, and Michael Swanson, of Seaside, Calif., on Oct. 6 with mail fraud, wire fraud, securities fraud, money laundering, and conspiracy to commit mail and wire fraud. According to the indictment, Alexander, 63, Pina, 44, and Swanson, 62, are alleged to have been partners in the management of an investment company called APS Funding, Inc. (APS). The indictment alleges that between 2006 and 2009, APS received more than $7 million from investors, yet between the end of 2008 and 2009, more than 90 percent of all of the invested funds were diverted to the partners for their personal use.
Please note, an indictment contains only allegations against an individual and, as with all defendants, Maher Muhawieh, Barbra Alexander, Beth Pina, and Michael Swanson must be presumed innocent unless and until proven guilty.
As a part of Operation Broken Trust, the task force is making the public aware of resources available to protect against these types of fraud and how to report fraud when it occurs. To learn more about investment scams, how to take steps to protect yourself from scams, or how to report investment fraud if you believe you have been victimized, the task force recommends that you visit its website, StopFraud.gov, which includes links to a wide array of task force member resources. You can also contact the San Francisco FBI office at 415-553-7400.
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney’s Office should be directed to Jack Gillund at (415) 436-6599 or by email at Jack.Gillund@usdoj.gov.
This site does not contain all press releases or court filings and is not an official record of proceedings. Please contact the Clerk of Courts for the United States District Court for official copies of documents and public information.