“Fraudsters talk big and hope no one looks too closely at the bottom line,” says US Attorney
Melville ten Cate Orchestrated Tender Offer Fraud and Other Related Fraud Schemes
>> See LawFuel Law Jobs Here
Damian Williams, the United States Attorney for the Southern District of New York, and Ricky J. Patel, the Acting Special Agent-in-Charge of the New York Field Office of Homeland Security Investigations (“HSI”), announced the unsealing of an Indictment charging MELVILLE TEN CATE with tender offer fraud, securities fraud, and wire fraud in connection with several schemes on behalf of his company, Xcalibur Aerospace Ltd. (“Xcalibur”), including a fraudulent tender offer worth more than $14 billion. TEN CATE remains at large.
U.S. Attorney Damian Williams said: “Fraudsters talk big and hope no one looks too closely at the bottom line. We allege Mr. ten Cate attempted to make his company look profitable and bluffed his way through the proposed purchased of a multi-billion dollar company. But it was all based on a lie. Instead of collecting on a hefty payday, he’s now facing series federal charges.”
HSI Acting Special Agent-in-Charge Ricky J. Patel said: “The filing of this indictment alleges that ten Cate sold lies to raise cash – swindling investors and companies along the way through multiple fraud schemes. Time and time again this fraudster believed he could outsmart unwitting pools of investors, luring them with phony stock tenders and a variety of false promises. Justice caught up with him and he is now facing charges for his criminal acts. HSI will never stop in its mission to pursue these unscrupulous actors anywhere in the world to keep the public safe and to preserve and protect the American financial system.”
According to the allegations contained in the Indictment filed today in Manhattan federal court:
From in or about August 2019 until in or about November 2020, MELVILLE TEN CATE, the defendant, executed fraudulent schemes designed to induce others to invest in, or otherwise transfer money to, Xcalibur and TEN CATE. First, TEN CATE attempted to secure $500 million in debt financing from U.S. banks and third-party debt issuers. In doing so, TEN CATE materially misrepresented Xcalibur’s business activities and finances to the banks and other potential investors, including by falsely claiming that Xcalibur’s financial records had been audited by an international accounting firm, that Xcalibur had outside investors, and that Xcalibur had cash reserves of almost £9.8 billion.
In a second scheme, in and about November 2020, TEN CATE placed an advertisement in a national newspaper (the “Newspaper”) in which he falsely claimed that Xcalibur had secured billions of dollars in financing and was making a tender offer to acquire a multibillion-dollar U.S. corporation (the “Target Company”). In furtherance of his scheme to issue the false tender offer for the Target Company, TEN CATE sent fabricated payment confirmations to the Newspaper and to a New York, New York-based printer (the “Printer”) that TEN CATE had hired to file the false tender offer with the U.S. Securities and Exchange Commission (“SEC”). The Newspaper published the false tender offer, but neither the Newspaper nor the Printer ever received payment and TEN CATE never completed the tender offer.
* * *
TEN CATE, 53, of Dubai, United Arab Emirates, is charged with one count of tender offer fraud, one count of securities fraud, and two counts of wire fraud. TEN CATE faces a maximum sentence of 20 years’ imprisonment on each count.
The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of a defendant will be determined by the judge.
Mr. Williams praised the investigative work of HSI. Mr. Williams also thanked the Securities & Exchange Commission, which brought a related civil action against TEN CATE that was filed today.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Kiersten A. Fletcher and Andrew Jones are in charge of the prosecution.
The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
22-102
