The Family Scam – Five Guilty Of Phantom Gold Mine Investment Scheme

LAWFUEL – Legal News Daily – MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, announced that JAMES RUSSO, RITA RUSSO, ELIZABETH RUSSO, RUDOLFO RUSSO a/k/a “Rudy”, and THOMAS
RUSSO, from New City, Rockland County, New York, pleaded guilty
today before United States Magistrate Judge LISA MARGARET SMITH to
charges that they conspired together over a period of more than 15
years to defraud victims around the country through a phony “gold
mine” investment scheme and various internet wholesaler schemes,
and committed wire fraud in connection with these schemes. JAMES
and RITA RUSSO are husband and wife and ELIZABETH, RUDOLFO a/k/a
“Rudy” and THOMAS RUSSO are their adult children.

According to the criminal Complaint and Indictment and
statements made in open court in White Plains today at the plea
proceeding, from about September 1987 through about September 2005,
the RUSSOS operated several different schemes to defraud. First,
the RUSSOS victimized a number of people both here in the United
States and in Europe by creating a fraudulent investment scheme
involving an fictitious gold mining operation in Brazil. The
RUSSOS induced their victims to give them more than $2 million over
the course of the last 18 years by making a number of false and
fraudulent misrepresentations, creating false and fraudulent
documents about the existence of the mine and its prospects for
sale, and promising their victims they would receive a percentage
of the proceeds when the alleged gold mine was eventually sold.
Second, the RUSSOS operated a series of internet
wholesaler scams, using the names R & S Wholesale, Russo & Sons
Wholesale, GinaLiz Industries, Global Liquidators & Auctioneers,
and Action Liquidators.

Each of these scams followed a similar
pattern: the RUSSOS would incorporate a business and create a
website, advertising high-end electronics, home furnishings, and
tools, all in original packaging and in new condition, but offered
at wholesale prices due to liquidations, closeouts, or overstocks.
The RUSSOS would take orders for pallet-sized quantities of this
merchandise from customers and direct the customers to wire payment
to a designated bank account. Some of the customers never received
any merchandise in exchange for their payment, while others
received junk, such as burned-out microwave ovens or broken out-ofdate
telephones, and still others received crates of extremely lowend
merchandise, far different in quality and value than the items

The RUSSOS operated these phony businesses in Westchester
and Rockland Counties, and victimized people all around the United
States and abroad. These internet wholesaler schemes have caused
losses to victims in excess of $1.5 million.

RUDOLFO RUSSO a/k/a “Rudy”, and THOMAS RUSSO pled guilty to Counts
One and Two of the Indictment; the RUSSOS were also charged with
various money laundering offenses in the Indictment, although they
did not plead guilty to those charges today. On Counts One and Two
of the Indictment, they face a maximum sentence of 20 years’
imprisonment and a maximum fine of $250,000 or twice the gross
pecuniary loss or gain derived from the offense, on each of the two
counts. Sentencing is scheduled for March 2008 before United
States District Judge STEPHEN C. ROBINSON.

Mr. GARCIA praised the efforts of the Federal Bureau of
Investigation and the Criminal Investigation Division of the
Internal Revenue Service and thanked them for their assistance in
this case.

This prosecution is being handled by the Major Crimes
Unit of the United States Attorney’s Office. Assistant United
States Attorney MARGARET GARNETT is in charge of this prosecution.

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