Former Sacramento tennis team owner gets 20 years in Ponzi scheme The $50 billion in Ponzi schemes uncovered from 2008 to 2013 would rank in the top 75 countries in the world in terms of gross domestic product. What Is the Kenvue IPO Price Range? The impact on the victims in this case was often devastating. A lock () or https:// means you've safely connected to the .gov website. A former owner of the Sacramento Capitals professional tennis team, Wannakuwatte purchased properties in Hawaii, Oregon and California. (ECF No. This equates to roughly $6.3 billion per year of investor wealth lost to Ponzi schemes or nearly the annual GDP of Africas Republic of Niger. The Court is mindful that people with certain medical conditions, including hypertension, can be more vulnerable to COVID-19. Deepal Wannakuwatte seemed prepared, barely a week ago, to accept a lengthy prison term for orchestrating one of the biggest Ponzi schemes in Sacramento history. You are a liar, a serial liar. For the reasons set forth below, the Court DENIES Defendant's motion. 25, 2020) ("General concerns about possible exposure to COVID-19 do not meet the criteria for extraordinary and compelling reasons for a reduction in sentence set forth in the Sentencing Commission's policy statement."). The reason for the lower figure was that some investors got their money back. In fact, there were no such invoices, and no such debt was owed by the VA to IMG. Wannakuwatte subsequently drew down the line of credit, taking approximately $4.3 million from Bridge Bank. 135.) For the foregoing reasons, the Court hereby DENIES Defendant's Motion for Compassionate Release Pursuant to 18 U.S.C. Several years later, Rocco revealed that a rival Indian tribe had stolen approximately $4 million to $5 million of uninsured cigarette inventory from the reservation, resulting in a total loss to investors. Sacramento, CA. Foundation v. Wannakuwate, 2:14-cv-0662 KJM CKD PS | Casetext Search Email Email. Bankruptcy trustee sues victims of massive Sacramento Ponzi scheme According to the Commission, Zeek Rewards current cash holdings of $225 million were at risk of rapid depletion had investors elected to receive cash distributions rather than accumulate profit points. A receiver was appointed by a North Carolina federal court to preserve and recover assets for the benefit of investors, and has recently sought to recover winnings from net winners that were fortunate enough to profit off their investment with Zeek Rewards. An official website of the United States government. In addition to fulfilling their divine duties, Mr. Hibbert told parishioners he could generate monthly returns of up to 8.5% through his skills as a foreign currency trader. He falsely claimed that these companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. watch now. (Id. This sentence brings to an end to one of the longest running, most extensive, and most damaging fraud schemes our region has ever seen, said U.S. Attorney Wagner. A lock ( The Court acknowledges USP Lompoc has had one of the worst COVID-19 outbreaks of any federal prison. D & A INTERNATIONAL IMPORT . An Internet Mortgage Provider Reaps the Rewards of Lending Boldly Well take a look at these, but first, a look at the staggering stats behind Ponzi schemes. These individuals collectively are associated with 20 companies in 10 cities. The loss has devastated him, according to a letter from his wife, Jayna. The sentence imposed today is tantamount to a life sentence, although no amount of prison time will undo the harm he caused to so many victims. In order to establish his financial credibility, Wannakuwatte showed investors his personal and corporate tax returns where he actually reported and paid taxes that falsely overstated his annual personal income and the annual gross receipts and sales for IMG. in Tampa, Fla. He will also surrender $8 million to $12 million worth of federal income tax refunds. Little if any legitimate investing actually takes place, and the Ponzi scheme depends on the continuous flow of funds from new investors to meet obligations to existing investors. But he walked into court that day and announced that hed fired his original lawyer, Donald Heller, claiming that Heller had coerced him into pleading guilty. Many of the victims will never be made whole, Wagner said. In total, the venture raised over $10 million from at least 40 investors. Sacramento, CA. Wannakuwattes companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. At least 385 of the perpetrators were sent to prison, with a total of nearly 5,000 years of cumulative prison sentences handed down. In the instant case, it is undisputed that Defendant has met the threshold exhaustion requirement. After the arrest, the franchise was disbanded by World TeamTennis. For more than decade, up until February 2014, Sacramento businessman (and Ponzi scammer extraordinaire) Deepal Wannakuwatte fooled his investors and his lenders into believing that he and his companies were worthy of their trust and their money. - Be extremely cautious about unsolicited offers to invest. Ultimately, Wannakuwatte obtained well over $230 million from his victims. Modelled Employees (all sites): ? (ECF No. According to court documents, from 2002 to 2014, Wannakuwatte convinced nearly 200 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Share sensitive information only on official, secure websites. 3553(a) (" 3553(a)") factors do not support a reduced sentence. Owner of Sacramento firms accused of fraud - kcra.com Guru operated Susi Emu Farms (Susi Farms), which promised potential investors a weekly return of $120 in exchange for a $3,000 investment that supposedly purchased a baby emu. VIDEO 04:01. Put another way, a Ponzi scheme was uncovered, on average, once every four days from 2008 to 2013. Deepal Wannakuwatte Profiles in AZ, CA, IL, LA, NV, and WA - Bizapedia A .gov website belongs to an official government organization in the United States. Coincidentally, a related company funded with investor funds was, until recently, the beneficiary of an investment by Barbara Corcoran a star of CNBCs hit show Shark Tank. 3582(c)(1)(A). Casetext, Inc. and Casetext are not a law firm and do not provide legal advice. 3582(c)(1)(A). (ECF No. Experts said it would have been difficult for Wannakuwatte to withdraw his guilty plea, and his new lawyer, Cozens, announced to the court in September that his client was ready to be sentenced. This information or any portion thereof may not be copied or disseminated in any form or by any means or downloaded or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. California Schemin' - Utah Stories For its part, the Government correctly notes that the presentencing report ("PSR") indicates Defendant underwent full knee replacement in 2012 and injured his left wrist in May 2014, but otherwise indicates Defendant is in good health. Wannakuwatte told his victims he had $100 million worth of contracts to supply latex gloves to veterans hospitals, when in fact the contracts totaled just $25,000 a year. These claims were not true but were made in order to appear more credit worthy. Gurus Emu-Raising Ponzi Scheme. This ruling concludes the federal criminal prosecution; civil proceedings in the United States Bankruptcy Court are ongoing. At least two of the investors were in court to watch Wannakuwatte plead guilty. Perhaps unsurprisingly, the overwhelming majority of Ponzi scheme perpetrators were males over 90%, to be exact. 20. Convicted Sacramento Businessman Ordered To Pay Over $108 Million In In exchange for their investment, Rocco promised investors annual returns ranging from 15% to 18%. The video promised that the VCMs would generate income for years, and promised that a $3,500 investment could produce huge returns. The alleged mastermind, Joseph Signore, is also accused of soliciting investors via emails that included a Bible passage intended to create a false sense of security and appeal to the religious beliefs of investors. I want to commend the FBI and IRS-CI for detecting and swiftly stopping this scheme before it caused even greater losses., Wanakuwattes victims individuals, businesses, government agencies, venture funds, and financial institutions suffered as his elaborate scheme collapsed. Email Email. Among other things, Wannakuwatte was ordered to turn over a $3 million private plane that had been pledged as collateral.. Do your due diligence when thinking about investing your hard-earned money (see sidebar). Because more than 30 days have elapsed since April 23, 2020, Defendant has met the exhaustion requirement. Deepal Wannakuwatte, the former owner of the now-defunct Sacramento Capitals professional tennis team, was sentenced to 20 years in prison Thursday for perpetrating one of the costliest Ponzi schemes in the regions history. In truth, the government contracts were worth only $25,000. The total losses to investor victims exceeds $100 million. SACRAMENTO, Calif. Deepal Wannakuwatte, 63, of Sacramento, was sentenced today to 20 years in prison for a long-running fraud scheme, announced United States Attorney Benjamin B. Wagner, Special Agent in Charge Monica M. Miller of the FBIs Sacramento Field Office, Acting Special Agent in Charge Thomas McMahon for the IRS-Criminal Investigation, and Special Agent in Charge Wade V. Walters of the Federal Deposit Insurance Corporation Office of Inspector General. Neither agreed to talk to The Bee afterward. Deepal Wannakuwatte - Bio, News, Photos - Washington Times To work, or not, on the Sabbath Gerald Groff shares his story with Alex New Episode: American sovereignty is in peril Frank Gaffney. In addition to the retail business, the company also promised its affiliates hefty returns for recruiting new participants and placing free advertisements on other sites. Theres no way I can make the victims whole, Nunley said. Have a question about Government Services? American Greed airs Thursdays at 10pm on CNBC. 3582(c)(1)(A)(i). International Manufacturing Group, Inc. Company Profile | West Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. Deepal Wannakuwatte, the former owner of the now-defunct Sacramento Capitals professional tennis team, was sentenced to 20 years in prison Thursday for perpetrating one of the costliest Ponzi. 13-CR-00313-PJH-1, 2020 WL 1450745, at *2 (N.D. Cal. With time off for good behavior, he could be out of prison by the time hes 79 or 80, giving him the opportunity to see his grandchildren.. Additionally, investor funds were used to support the lavish lifestyle of Persaud and his family members. Robert Rocco, 48, was indicted in 2013 on multiple federal fraud charges that could land him behind bars for decades. The. 3582(c)(1)(A) (requiring a consideration of the 3553(a) factors before granting compassionate release). We are pleased to have played a part in bringing Mr. Wannakuwatte to justice and value our cooperative working relationships with the U.S. Attorneys Office, FBI, and IRS-CI.. However, the truth was that neither the meat nor the oil from emus was valuable. . The sentence imposed today is tantamount to a life sentence, although no amount of prison time will undo the harm he caused to so many victims. Wannakuwattes decadelong crime constitutes very possibly the largest Ponzi scheme in the regions history, Wagner said. According to court documents, from 2002 to 2014, Wannakuwatte convinced nearly 200 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Wannakuwatte was born in Sri Lanka and moved to Georgia to play tennis in college. In total, Sundown raised more than $7 million from over 150 investors. A New York man was accused of using his position as head of a soccer club to dupe investors out of more than $5 million in a Ponzi scheme that purportedly financed the sale of cigarettes to a Native American Indian reservation. 3553(a) (" 3553(a)") factors. Fri, Aug 12 2016 4:30 PM EDT. Secure .gov websites use HTTPS Based on these representations, IMG and RelyAid raised at least $125 million from numerous investors. Perhaps fittingly, Madoffs 150-year sentence ranks as the longest Ponzi prison sentence. KVUE Stock IPO: When Does Kenvue Go Public? We are committed to aggressively pursue those who attempt to circumvent the law for personal gain., This case shows that the appearance of success can mask a tangled financial web of lies, said Acting Special Agent in Charge Thomas McMahon, IRS-Criminal Investigation. 135.) Cal. Assistant United States Attorneys Michael Beckwith and Kevin Khasigian are prosecuting the case. In a Ponzi scheme, early investors often get repaid with dollars pumped in by newcomers. Financial Market Data powered by FinancialContent Services, Inc. All rights reserved. Copyright 2015, American Bar Association. 138 at 9-15. The case began in September 2013, when our Sacramento office was contacted by a representative of one of Wannakuwattes business associates who thought he might be the victim of a Ponzi scheme. When the so-called lifeblood of a Ponzi scheme dries up and investor obligations cannot be met, the scheme unravels often in destructive fashion, leaving a path of devastation in its wake and irreversibly affecting the lives of those ensnared in its web. The FBI joined forces with IRS and VA investigators and began looking at Wannakuwatte, his businesses, and his financials. The views expressed in this article are those of the author(s) and do not necessarily reflect the positions or policies of the American Bar Association, the Section of Litigation, this committee, or the employer(s) of the author(s). Investors were told that an investment in JCS Enterprises involved the purchase of a virtual concierge machine (VCM) that resembled an automatic teller machine and allowed users to view advertisements for products or services. He further avowed that these companies had annual revenues in the tens of millions of dollars. Charles Ponzi would eventually serve nearly two decades in federal and state prison for that and related scams, but little did he know that his surname would one day epitomize one of the most potent weapons of financial destruction ever encountered. Recently, Ponzitracker.com compiled an extensive collection of statistics from Ponzi schemes during the six-year period from 2008 to 2013, and the results were staggering. Nunley was unsparing as well, calling Wannakuwatte a liar and adding: Youre an evil person, theres no way you can get around that.. While Madoff initially maintained that he acted alone, it became apparent that the sheer size of his scheme meant he alone could not have kept the scheme going for so long. With the millions he collected, Wannakuwatte - a former owner of the now defunct Sacramento Capitals professional tennis team - bought real estate in Hawaii, Oregon and California. With the millions he collected, Wannakuwatte a former owner of the now defunctSacramento Capitals professional tennis team bought real estate in Hawaii, Oregon and California. There are 20 individuals that go by the name of Deepal Wannakuwatte. The case against Deepal Wannakuwatte was already one for the books: a successful immigrant businessman, owner of a professional tennis team, admitting he had perpetrated one of the largest Ponzi. However, while IMG and RelyAid did have a business relationship with the USVA, authorities alleged that this relationship was grossly overstated.

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