North Potomac Felon Indicted in $212,000 Business Fraud Scheme
BALTIMORE, MD—A federal grand jury has indicted Curtis R. Martin, Jr., age 55, of North Potomac, Maryland, on charges related to a scheme to defraud a business of more than $212,000. In addition, the indictment charges Martin with making false statements to his probation officers. The indictment was returned on March 18, 2015, and unsealed on March 26, 2015, upon Martin’s arrest.
The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.
According to the 14-count indictment, Martin purported to operate technology companies, including Oledix Technologies, LLC and The Oledix Store, LLC, as their President and Chief Executive Officer (CEO). Martin represented that Oledix Technologies was in the business of selling video teleconferencing equipment that employed LED touchscreen technology, and that The Oledix Store was a retail outlet for Oledix Technologies. In fact, neither company did any significant amount of business.
According to the indictment, Martin, through false and fraudulent representations, obtained a total of approximately $212,455 between May and August 2012, from New Century Financial (NCF), a company that provides account receivable financing. Martin allegedly used the funds for personal and business-related expenses.
Accounts receivable financing permits a business to obtain loans from a lender or financing company based upon outstanding invoices issued to customers, but for which payment is not yet due under the terms of the invoice. An accounts receivable financing company agrees to provide financing that is less than the full face value of the invoice. The business receiving the financing instructs its customer to make the payment owed on the invoice to the financing company, which retains the difference between the amount financed and the full face value of the invoice as its profit.
The indictment alleges that that Martin submitted an on-line application for financing to NCF that falsely represented and inflated the monthly sales of Oledix Technologies. In support of the financing application, Martin submitted additional fraudulent documents, including bank statements, financial reports, and sales summaries, that presented a false and misleading picture of the financial position of Oledix Technologies. Finally, Martin provided NCF with fraudulent invoices which falsely represented that Oledix Techologies had sold electronic devices relating to video teleconferencing capabilities to Company 1 at a cost of $159,000, and had sold Johns Hopkins Hospital/Hopkins Medical Center three “Oledix mobile telemedicine carts” at a cost of $174,200. Martin submitted an additional fraudulent invoice to NCF claiming that Hopkins had purchased an additional six “Oledix Mobile Telemedicine Carts” for a total price of $332,550. The indictment alleges that Oledix Technologies actually owed money to Company 1, and had not sold any equipment to Johns Hopkins . To carry out the scheme, Martin allegedly sent or caused to be sent to NCF fraudulent e-mails, purporting to be from a Hopkins doctor and from a Hopkins account manager, which falsely confirmed the validity of the Hopkins invoices.
The indictment further alleges that from July 2011 through July 2013, Martin made false statements to his probation officers. During that time, Martin was on supervised release for a 2010 federal conviction in the Eastern District of California. As part of his supervised release, Martin was required to provide his probation officer with a monthly report detailing personal, employment and financial information. Martin certified that the information provided on the forms was correct. The indictment alleges that Martin made false statements on the forms he provided to his probation officer, including where and with whom he was living, where he was employed, and that he was not a party to any lawsuit.
The indictment seeks forfeiture of $212,455, believed to be the proceeds of the fraud scheme.
Martin faces a maximum sentence of 20 years in prison for each of nine counts of wire fraud, and a maximum of five in prison for each of five counts of making a false statement. Martin had his initial appearance on March 26, 2015 and is detained.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
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.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation and thanked the U.S. Probation Office for its assistance. Mr. Rosenstein thanked Assistant U.S. Attorney Jefferson M. Gray, who is prosecuting the case.