Five Men Charged in $2.5 Million Grant Fraud Scheme
LAS VEGAS, NV—Five men have been indicted by the federal grand jury on charges that they fraudulently obtained more than $2.5 million from small business owners for grant funding and services which were never provided and never intended to be provided, announced U.S. Attorney Daniel G. Bogden for the District of Nevada and Laura A. Bucheit, Special Agent in Charge of the FBI for Nevada.
Pierre Franco-Ramos, 33, and Danny Goodman, 68, of Las Vegas, Victor Vazquez, 31, of Henderson, Andre Jackson, 43, of North Las Vegas, and Ronald Defusco, 48, of Johnston, Rhode Island, are charged with one count of conspiracy to commit mail fraud and wire fraud. Additionally, Franco-Ramos and Vazquez are charged with eight counts of mail fraud and eight counts of wire fraud; Goodman is charged with four counts of mail fraud and three counts of wire fraud; Defusco is charged with one count of mail fraud; and Jackson is charged with one count of wire fraud.
Franco-Ramos and Vazquez were arrested in Las Vegas this morning and are scheduled to appear before U.S. Magistrate Judge Carl W. Hoffman at 3:00 p.m. today for an initial appearance and arraignment. The three other defendants are not yet in custody.
“Advance fee fraud schemes are common and perpetrated for the sole purpose of ripping off unsuspecting victims to enrich greedy fraudsters,” said U.S. Attorney Bogden. “We are currently prosecuting a number of these cases in which the defendants prey on unsuspecting business owners who are seeking grants for their businesses. If you think you have been victimized by persons committing this sort of crime, please contact the FBI.”
“Today’s arrests emphasize the FBI’s dedication to investigate financial crimes and prosecute those who prey upon unsuspecting citizens,” said Special Agent in Charge Bucheit.
According to the indictment, from about 2009 to February 2012, the defendants and their coconspirators allegedly induced small business owners to give them money for services that the small business owners thought they needed to secure grant funding. In reality, the defendants did not intend to or provide the services or the grant funding, and the true purpose of the money they received from the business owners was to personally enrich the defendants.
Among other things, the indictment alleges that the defendants told the business owners they would assist them with business plans, web services, non-profit status, and other paperwork that was necessary to obtain the grant funding. The defendants also made numerous false representations and promises to the small business owners, operated under multiple and evolving business names, and changed the business’ physical location to dissociate themselves from the clients’ complaints that were made on the Internet and with law enforcement. Using this fraud scheme, the defendants allegedly fraudulently obtained more than $2.5 million from the victims.
If convicted, the defendants face a maximum of 20 years in prison and a $250,000 fine on all counts.
The case is being investigated by the FBI, and prosecuted by Assistant U.S. Attorney Kathryn C. Newman.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The 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 about the task force visit: www.stopfraud.com.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.