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15 November 2004 – LAWFUEL – Law, legal, attorney news – Marcos Dani…

15 November 2004 – LAWFUEL – Law, legal, attorney news – Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; James K. Belz, Inspector in Charge, United States Postal Inspection Service; and Michael S. Clemens, Special Agent in Charge, Federal Bureau of Investigation, announced today the November 12, 2004 arrest of defendant, Gregory Swarn, a former resident of Miami Beach, Florida, on a criminal complaint charging him with conspiring to operate a multimillion dollar securities fraud scheme out of the Dominican Republic, following his expulsion from the Dominican Republic. Swarn also has pending against him several other criminal charges in the 2003 case styled as United States v. John Porcaro, et al.

The latest charges against Swarn resulted from a United States Postal Inspection Service led investigation. The criminal complaint against Swarn charges him with wire fraud and conspiracy to commit wire fraud, in violation of Title 18, United States Code, Sections 1343 and 1349, respectively. A second criminal complaint charges Swarn’s two (2) co-conspirators, John W. Eckhardt and Craig Worrell Moncrieffe, with the same charges. According to the criminal complaint, Swarn, on January 24, 2004, upon learning of the 2003 Indictment, fled the United States on a Lufthansa flight from Miami International Airport. During the course of the United Postal Inspection Service led investigation, Swarn, as recently as September 22, 2004, confirmed that he was a present in Bangkok, Thailand. In furtherance of the conspiracy alleged in the criminal complaint, Swarn traveled to the Dominican Republic to set up a multimillion dollar securities fraud boiler room operation based from a call center in Santo Domingo.

During approximately February, 2003, the United States Securities and Exchange Commission (“SEC”) began receiving complaints from numerous foreign investors, each of whom had been solicited and/or victimized by then unknown perpetrators running uniquely similar securities-related “advance fee” schemes. As determined by the SEC, the solicitations or “pitches” attendant to these particular reported schemes included either proposed stock swap or straight stock purchase transactions which were later found to be fraudulent from the inception, but which involved the remittance of certain pre-transaction “advance” payments by foreign investors. These payments included claimed up-front U.S. government-required tax payments, or advance payments of the victim’s purported “share” of an allegedly required pre-transaction performance bond to be posted pending finalization of a particular stock sale transaction by the victim. Once such payments were made, however, the victims never heard further from representatives of the firms in question.

The fraud schemes were conducted through four (4) consecutively established supposed high-end financial consultancy and/or brokerage firms named “Crescent Financial Group,” “Berkshire Tax Consultants,” “Warfield Capital Management,” and “Spencer Ferguson Wealth Management, Ltd.” Each of these firms claimed on their respective websites (subsequently determined to be bogus) to specialize in investment and financial planning activities. Moreover, two (2) additional consecutively established firms (the fifth and sixth in progression) named “Thompson & Whitehurst Acquisition Consultants” and “McKenzie Goldstein & Associates” were eventually discovered to be involved. These two (2) firms held themselves out as corporate merger and acquisition specialists upon their fraudulent websites.

The six (6) firms were determined to be bogus and to have made use of impostor websites constructed from portions of legitimate websites that were then being operated by bona fide investment, financial planning, and merger/acquisition firms. In addition, each of these firms was discovered to have made use of fictitious address information that conveyed the impression that the particular firm was situated in a place where it actually had no physical presence. This was accomplished through the use of so-called “virtual office” service providers that allowed subscribers to communicate the physical address of the service’s “virtual office suite” facility. All six (6) of the firms re-directed incoming telephone and fax communications to certain pre-paid cell phones and internet web-based e-mail accounts.

According to the criminal complaint, Swarn was the principal architect of the scheme. Swarn is further alleged to have actually created each of the firm’s bogus websites by purloining material from legitimate websites. Swarn also is alleged to have played a role in impersonating certain non-existent named firm “attorneys” who dealt with many of the victims over the phone or through bogus transactional documents which were faxed to the victims.

During the United States Postal Inspection Service investigation, Moncrieffe and Eckhardt met on a number of occasions for the purpose of discussing the necessary preliminary details attendant to the establishment of a planned securities fraud boiler room operation based from a call center in Santo Domingo, Dominican Republic. Swarn participated by telephone from his foreign location, which he confirmed to be Bangkok, Thailand. It was during these recorded meetings that the three (3) defendants discussed various aspects of their proposed operation. According to the criminal complaint, the defendants agreed that the “boiler room” operation would never earn up to $2 to $5 million dollars per month and never less than $1 million dollars per month.

The 2003 Indictment charges Swarn as well as five (5) other defendants, John Porcaro, Francine Leone, Scott Amster, Allan Steven Ader, and Steven Goldstein, based on a locally-based investment fraud scheme. Swarn is charged with one (1) count of conspiracy to commit wire and mail fraud, in violation of Title 18, United States Code, Section 371; four (4) counts of wire fraud, in violation of Title 18, United States Code, Sections 1343 and 2; four (4) counts of mail fraud, in violation of Title 18, United States Code, Sections 1341 and 2; one (1) count of conspiracy to commit money laundering, in violation of Title 18, United States Code, Section1956(h); and four (4) counts of money laundering, in violation of Title 18, United States Code, Sections 1956(a)(2)(A), 1956(a)(2)(B)(i), and 2. If convicted on the conspiracy to commit wire and mail fraud count, Swarn faces a maximum statutory term of imprisonment of five (5) years. If convicted on the wire fraud and mail fraud counts, Swarn faces a maximum statutory term of imprisonment of twenty (20) years per count. If convicted on the conspiracy to commit money laundering count, Swarn faces a maximum statutory term of imprisonment of twenty (20) years. If convicted on the money laundering counts, Swarn faces a maximum statutory term of imprisonment of twenty (20) years per count.

Leone, in that case, pleaded guilty on September 9, 2004, to a Superseding Information charging her with conspiracy to commit wire fraud. She is scheduled to be sentenced on November 19, 2004. Amster pleaded guilty on August 9, 2004, to the Superseding Information charging him with conspiracy to commit wire fraud. On November 8, 2004, Amster was sentenced to a thirty-four (34) month term of imprisonment and a three (3) year term of supervised release and was ordered to pay restitution in the amount of $779,785 to victims of the fraud. Ader, on October 21, 2004, pleaded guilty to the Superseding Information charging him with conspiracy to commit wire fraud and is scheduled to be sentenced on January 14, 2004. Steven Goldstein, on September 30, 2004, pleaded guilty to the Superseding Information charging him with conspiracy to commit wire fraud and is scheduled to be sentenced on December 10, 2004. Porcaro remains a fugitive.

Mr. Jiménez commended the investigative efforts of the United States Postal Inspection Service and the Federal Bureau of Investigation. Mr. Jiménez also commended Dominican Republic authorities for their cooperation and the United States Securities and Exchange Commission, which today filed a civil action against the six (6) firms mentioned above. The latest prosecution is being handled by Assistant United States Attorney Peter B. Outerbridge. The 2003 prosecution is being handled by Assistant United States Attorneys Lawrence Lavecchio and William Shockley.

A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls . Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on .

British MP George Galloway and his opponent the Daily Telegraph will leave no stone unturned to sort out what could be a spectacular libel case.