Former Las Vegas Resident Who Defrauded Persons in Investment Fraud and Marketing Scheme Pleads Guilty
|U.S. Attorney’s Office October 18, 2012|
LAS VEGAS—A former resident of Las Vegas who fled to Fiji after being charged with defrauding victims of over $1.4 million in an investment fraud and marketing scheme, pleaded guilty today to fraud and tax evasion charges, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
Aneal Maharaj, 64, currently in custody, pleaded guilty before U.S. District Judge James C. Mahan to one count of mail fraud, two counts of wire fraud, one count of tax evasion, six counts of bank fraud, and one count of making a false declaration in a bankruptcy petition. Maharaj is scheduled to be sentenced on January 16, 2013, at 10:00 a.m. and faces up to 250 years in prison and $7.25 million in fines.
“If you think you can defraud persons and then run away to another country to hide from your crimes, you might be wrong,” said U.S. Attorney Bogden. “The Department of Justice will use the full extent of its resources to find and extradite persons who have defrauded victims through investment, marketing, and other fraud schemes, and in the end, these criminals will face the justice system.”
Beginning in about 1990 and continuing to about October 2004, Maharaj operated a multi-level marketing program from Las Vegas wherein he promised persons that they could pay off a 30-year mortgage in five years or less by investing and becoming franchise owners in a business he called “PowerNet Marketing Systems” and a “home loan plan” he called Systematic Mortgage Amortization Reduction Technology (SMART). The system required the investors to recruit additional persons into the program, which Maharaj told them would entitle them to substantial commissions and income. Maharaj knew that no individual had ever paid off a 30-year mortgage in five years or less using the SMART plan and that he had no intention of paying the commissions and income to the participants. At least 17 individuals each invested a minimum of $25,000 and up to $500,000 with Maharaj to become franchise owners in his fraudulent marketing program. The plea agreement states that Maharaj convinced one victim to sign over his interest in his $100,000 life insurance benefit. The loss to the victims is estimated to be approximately $1.4 million.
Maharaj was originally charged in September 2005 with mail fraud and wire fraud. Additional charges were filed against Maharaj in October 2008, including structuring cash transactions, money laundering, tax evasion, bank fraud, and making a false declaration in relation to a bankruptcy proceeding. Shortly thereafter, the government filed a motion requesting the court to detain Maharaj pending trial, alleging that Maharaj was committing new crimes while on pretrial release, including engaging in the same conduct for which he was originally indicted. The court did not immediately detain Maharaj and set a hearing on the matter. Maharaj fled to Fiji and failed to appear at the hearing. In February 2009, the U.S. Department of Justice began extradition proceedings. Maharaj fought extradition for more than two years, but on November 15, 2011, he was extradited to Las Vegas to face the charges.
Maharaj has not filed a tax return since at least 1995 and admitted in his guilty plea that from 1995 to about October 2004, he kept a substantial portion of the payments that the victims made to “Powernet” for his own use and benefit and did not pay taxes on the income. Maharaj used the proceeds of the fraud scheme to purchase homes in Las Vegas and Henderson between December 2003 and August 2004. Maharaj financed the homes through Countrywide Home Loans and caused false and fraudulent information to be included in the home loan applications concerning his employment, income, assets, and liabilities. Maharaj also filed for bankruptcy and made false statements in his petition concerning ownership of the homes.
The case is being investigated by the FBI and IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorneys Brian Pugh and Nicholas Dickinson.
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 is 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. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.