California Man Arraigned for Role in Multi-Million-Dollar Fraud Scam
|U.S. Attorney’s Office November 05, 2013|
BOSTON—A California man was arraigned yesterday after being indicted for defrauding a number of borrowers looking for multi-million-dollar financing.
Damien Hess, a/k/a John Hess, 36, the former chief executive officer of Quest Capital Finance (Quest), was arraigned yesterday after being indicted for wire fraud and conspiracy.
The indictment alleges that between 2008 and 2012, Hess and his co-defendant, Lucas Ford, falsely represented that Quest was a financing company with hundreds of millions of dollars to lend to prospective borrowers. Hess and Ford told these borrowers that in order to close on these loans, the borrowers first needed to put hundreds of thousands of dollars into escrow accounts that would be held by a third party until all contingencies for the financing were resolved. Contrary to explicit statements contained in the escrow agreements, prior to all contingencies being resolved and without providing any financing for the prospective borrowers, Ford and Hess took all or most of the escrowed money and transferred it to their company. Those stolen funds were later transferred to other business and personal accounts and used for personal expenses, such as plastic surgery and trips to Disneyland. When the deadlines for the various loan closings passed and borrowers asked where their loans were, Hess and Ford made false representations that the financing would be available shortly and provided a series of false excuses to explain why the funding was not yet ready. In total, Hess and Ford took into Quest more than $2.8 million worth of borrower deposits and never provided any financing.
If convicted, the maximum sentence under the statute is 20 years in prison for the wire fraud counts, three years of supervised release, and a fine of the greater of $250,000 per count or twice the gross loss or gain resulting from the offense.
United States Attorney Carmen M. Ortiz; Vincent B. Lisi, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Rafael A. Medina, Special Agent in of the U.S. Postal Service, Office of Inspector General, Northeast Area Office, made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Sara Miron Bloom and Patrick M. Callahan of Ortiz’s Office.
The details contained in the indictment are allegations. The defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.