Fugitive in Multi-Million Dollar Fraud Case Arrested in Canada
|U.S. Attorney’s Office October 21, 2009|
McALLEN, TX—A fugitive who was indicted last year on three counts of wire fraud for operating a multi-million dollar fraud scheme has been arrested near Toronto, Canada, United States Attorney Tim Johnson announced today. Francisco Beltran, 42, formerly of Cleveland, Ohio, was taken into custody by the Royal Canadian Mounted Police (RCMP) this morning and will remain in their custody to face proceedings concerning his extradition to the United States.
According to the indictment, returned Dec. 16, 2008, by a federal grand jury in McAllen, Beltran worked for Barnes Distribution, a distributor of industrial and automotive supplies based in Cleveland, Ohio. As a purchasing consultant for Barnes from 2005 to 2007, Beltran’s role was to procure and purchase supplies from companies around the country for re-sale by Barnes to retailers. In turn, these suppliers would order the requested supplies from manufacturers and then deliver them to Barnes for re-sale. Beltran was terminated from his position at Barnes in March 2007.
After his termination, Beltran allegedly continued to hold himself out to suppliers across the country as a purchasing consultant for Barnes, contacting the suppliers and represented his interest in purchasing large quantities of industrial and automotive supplies on behalf of Barnes. As a condition to many of the supply purchases, Beltran would typically direct unsuspecting suppliers to use a third-party manufacturer, most often Wing Wah Lighting, to secure the supplies for Barnes. Beltran represented Wing Wah as a Barnes-approved manufacturer, but, according to the indictment, Beltran had created Wing Wah to be a corporation for the sole purpose of receiving wire transfers from the victim suppliers.
In a typical transaction, Beltran would allegedly created the Barnes purchase orders on his home computer—using Barnes’s logo and proprietary transaction codes—and submitted the purchase order to the victim supplier. Per the agreement with Beltran, the supplier would then request the relevant supplies from Wing Wah. The supplier would wire payment to Wing Wah for the supplies, believing Wing Wah would ship the automotive supplies directly to Barnes. However, Wing Wah never provided supplies to any of the parties. Over time, court documents allege, suppliers in various parts of the country, including one based in Mission, Texas, wired more than $3 million to Beltran’s Wing Wah bank account among other illicit accounts and entities controlled by Beltran based on the fictitious purchase orders Beltran submitted to the suppliers.
If convicted of wire fraud, Beltran faces up to 20 years in federal prison for each wire fraud count, a $250,000 criminal fine and mandatory restitution. There is no parole in the federal system.
The investigation leading to the charges and today’s arrest was conducted by the FBI, Interpol, and the RCMP. The case is being prosecuted by Assistant United States Attorney Gregory S. Saikin with the assistance of Trial Attorney Lisa Roberts of the Department of Justice’s Office of International Affairs.
An Indictment is a formal accusation of criminal conduct, not evidence.
The defendant is presumed innocent unless and until convicted through due process of law.