DENVER – 25 July – LAWFUEL – The Law News Network – Bill Leone, Acting United States Attorney for the District of Colorado, Kathleen Roberts, Postal Inspector In Charge in Denver, and Richard C. Powers, Special Agent in Charge of the Federal Bureau of Investigation’s Denver Office, announced that CLAUDE LEFEBVRE, age 62, a citizen of Quebec, Canada, was sentenced today by U.S. District Judge Robert E. Blackburn to serve 20 years in federal prison for committing fraud and making illegal monetary transactions. He was also ordered to pay $3,945,189.07 in restitution to Comet Enterprises.
LEFEBVRE was found guilty on December 6, 2004, following an eight day trial to the court. A co-defendant, DENNIS HERULA, age 57, of Warwick, Rhode Island, and Tiburon, California, was sentenced on February 11, 2005 to serve over 15 years in federal prison for his role in the fraud. HERULA was also ordered to pay a total of $14,824,933.43 in restitution to three victims, one from the LEFEBVRE case in Colorado and two from a case originally charged in Rhode Island.
According to testimony presented to the judge during the trial, LEFEBVRE and HERULA operated a sophisticated scheme to defraud wealthy individuals. The defendants told their victims that the funds would be invested in high-yield “financial institution instruments” in a trading program that would generate profits of at least 75 percent per week. They represented that the opportunity was available only to those who could invest at least $10,000,000.
One victim invested over $14,000,000 and another victim and his partner invested a total of $40,000,000. The defendants opened accounts at Merrill Lynch and then took several million dollars of the funds for their personal use before the crime was discovered and the accounts were frozen.
The government presented testimony that LEFEBVRE and HERULA made many misrepresentations about their plans to invest the money and also failed to inform the investors that the Securities and Exchange Commission (SEC) had sued HERULA on April 1, 2002 for securities fraud in federal court in Rhode Island.
On July 31, 2002, the SEC filed a civil complaint against LEFEBVRE and HERULA in federal court in San Francisco based on the conduct charged in the indictment in this case. That court froze the defendants’ assets, and in April 2004 it entered a default judgment and permanent injunction against LEFEBVRE.
“The U.S. Postal Inspection Service is committed to the investigation and prosecution of individuals who seek to deceive investors. High-Yield Investments which tout excessive returns with little or no risk, and often claim to support humanitarian causes continue to victimize investors of millions of dollars each year. These schemes divert money from legitimate investments and charitable efforts. If it sounds too good to be true, it probably is,” noted Denver Postal Inspector In Charge Kathleen Roberts.
The LEFEBVRE case was investigated by the U.S. Postal Inspection Service and the Federal Bureau of Investigation.
The case was prosecuted by Assistant United States Attorneys Linda Kaufman and Michael Theis.