Allegedly Used Investors’ Funds to Promote Company and Purchase Luxury Automobiles
SAN FRANCISCO – A federal grand jury in San Francisco has indicted Rebecca M. Solomon and Terry R. Solomon, of Tiburon, for their role in an $18 million high-yield investment scheme, United States Attorney Scott N. Schools announced today. The indictment alleges a scheme in which the Solomons solicited investors for two funds, one to purchase and re-sell a multi-million dollar diamond and the other for an investment in a telecommunication hardware company in China. According to the indictment, Mr. and Mrs. Solomon did not invest the funds, but spent the majority of the investors’ funds on promoting their company, the purchase of luxury automobiles, and other items such as vacations for themselves and family members. The indictment was returned on December 20, 2006, and unsealed on March 2, 2007. These charges are the result of an investigation by IRS Criminal Investigation and the FBI.
Arrest warrants have been issued for Rebecca M. Solomon and Terry R. Solomon. Anyone with information of their whereabouts can contact the FBI at 415-553-7400 or the IRS at 415-479-8424 ext. 253.
According to the indictment, which was returned on December 20, 2006, and unsealed today, Mr. Solomon, 58, and Mrs. Solomon, 49, are alleged to have operated Kristoffer International Inc., a jewelry brokerage company, and The Soloman Investment Group, Inc. (SIGI), both located in Tiburon, California. Mrs. Solomon was the president of both Kristoffer and SIGI and was primarily responsible for soliciting funds from potential investors. Mr. Solomon was a registered agent of SIGI and responsible for explaining the details of the investment plans to potential investors. Mr. Solomon also provided the logistical details and documents associated with SIGI to investors.
From about May 2004 through April 2006, Mr. and Mrs. Solomon solicited funds from investors to be used to purchase and resell a multi million-dollar diamond. The defendants claimed to have inside information about purchasing a very large, valuable, flawless diamond on the wholesale market. It was further explained to investors that the funds were needed to secure the diamond, transport it to a known buyer in Japan, and sell it for a considerable profit. After receiving the funds, Mr. and Mrs. Solomon assured the investors that the diamond transaction had been completed and investor returns would be forthcoming, when in fact, as Mrs. Solomon later admitted to several investors, that no diamond transaction ever occurred and no returns were ever realized pertaining to an actual diamond transaction.
During this same time period, Mr. and Mrs. Solomon also solicited funds for a leasing company dealing in telecommunication hardware in China. Investors transferred money into the Solomon’s bank accounts for a 60-day period with promises of guaranteed 20% return on their investment. After the initial 60-day period, Mr. and Mrs. Solomon convinced investors to roll their initial investments into second and third rounds of investments based on the promise of a higher ultimate return. The Solomons encouraged investors to recruit friends and family and provided them with financial incentives for successful recruiting of additional investors.
The maximum statutory penalty for each count of conspiracy, in violation of 18 U.S.C. § 371, is five years and a fine of $250,000. The maximum statutory penalty for the counts of mail fraud and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343 is 20 years imprisonment and a fine of $250,000, plus restitution if appropriate. The maximum statutory penalty for the counts of money laundering in violation of 18 U.S.C. § 1956(h) (conspiracy), 18 U.S.C. § 1956(a)(1)(A)(i) (money laundering – promotion) is 20 years and fine of $500,000, or twice the value of the property involved in the transaction, or which ever is greater. The maximum statutory penalty for the violation of 18 U.S.C. § 1957 is 10 years in prison and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
An indictment contains only allegations against an individual and, as with all defendants, Mr. and Ms. Solomon must be presumed innocent unless and until proven guilty.
Jeff Nedrow is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of a two year investigation by the IRS Criminal Investigation and the FBI.
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at [email protected]