OAKLAND – LAWFUEL – Law News Network – United States Attorney Kevin V. Ryan announced that a federal grand jury in Oakland indicted John Frances Griffin, of Orinda, California, on November 30, 2006, with mail fraud and tax evasion, in a scheme in which he lied to investors and employees about making significant loans to the company that he was running. These charges are the result of an investigation by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.
According to the superseding indictment, Mr. Griffin, 43, was the Chief Executive Officer of VaporTech, Inc., a start-up company located in Livermore, California that is involved in the research and development of technology which converts fuel to hot water, high quality steam or superheated water vapor. Griffin was charged with engaging in a scheme from February 2004 to May 2006, in which he falsely told investors that he had loaned $275,000 to VaporTech in order to entice them to invest in VaporTech. The indictment also alleges that Mr. Griffin falsely told VaporTech employees that he had loaned VaporTech $1 million in order to conceal the fact that he had taken money from the company bank account without authorization.
The indictment further charges that during the calendar years 2004 and 2005, Mr. Griffin evaded the assessment and payment of his income taxes by failing to provide his social security number to the VaporTech CFO, cashing his salary checks instead of depositing them, and by extensively using cash and cashier’s checks to avoid detection of his income. Mr. Griffin also failed to keep books and records of his business activities.
The indictment also seeks forfeiture of the following which Mr. Griffin purchased with company funds: a $30,359 diamond ring, a $3,425 gold tennis bracelet, two televisions each worth more than $3,700, and more than $17,000 worth of clothing purchased from Neiman Marcus.
Mr. Griffin was arrested on May 11, 2006, and made his initial appearance in federal court in Oakland on the same day. Mr. Griffin was originally charged on May 18, 2006, with three counts of mail fraud. The superseding indictment from last Thursday added two counts of tax evasion. He is currently at a half way house. The defendant’s next scheduled appearance is on December 8, 2006, before Magistrate Judge Brazil for arraignment on this superseding indictment.
The maximum statutory penalty for each count of mail fraud, in violation of 18 U.S.C. § 1341, is 20 years and a fine of $250,000, plus restitution. The maximum statutory penalty for each count of tax evasion, in violation of 26 U.S.C. § 7201, is five years imprisonment and 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. Griffin must be presumed innocent unless and until proven guilty.
Maureen Bessette is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Cynthia Daniel. The prosecution is the result of an investigation by IRS-CI and the FBI.
Case #: CR06-00365
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]