Men Charged in $3.5 Million Grant Fraud Scheme
LAS VEGAS, NV—Three Las Vegas men have been indicted by the federal grand jury on charges that they fraudulently obtained more than $3.5 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.
Michael Jones, 35, Jason Demko, 38, and Mike Guariglia, 47, all of Las Vegas, are charged with one count of conspiracy to commit mail fraud and wire fraud, four counts of wire fraud, and criminal forfeiture. They are scheduled to appear before U.S. Magistrate Judge Cam Ferenbach at 3:00 p.m. today for an initial appearance and arraignment.
“Advance fee fraud schemes are common and perpetrated for the sole purpose of enriching the 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.”
“These indictments highlight the FBI’s unrelenting commitment to investigate financial crimes and serve as a reminder for consumers to be vigilant and protect themselves,” said Special Agent in Charge Bucheit.
According to the indictment, from about December 2010 to the spring of 2013, the defendants and their coconspirators allegedly induced small business owners to give them money in exchange for services, such as business plans and other paperwork that would help them obtain grant funding. The defendants knew that the services were not necessary or likely to produce grants, and knew that the true purpose of the money was to personally enrich the defendants. The defendants and coconspirators received numerous complaints from the clients. In order to prevent and delay the clients from reporting them to law enforcement, the defendants made false promises and representations, told them their funding was forthcoming, operated under several business names, including Summit Business Consultants Inc., Inner Circle Corporation LLC, Sierra Investment Group, Inc. and Valley Business Development, and changed the physical locations of the businesses. Using this fraud scheme, the defendants allegedly fraudulently obtained more than $3.5 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 Sarah E. Griswold.
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.