27 May 2010 – LawFuel.com – PREET BHARARA, the United States Attorney for the
Southern District of New York, and GEORGE VENIZELOS, the Acting
Assistant Director-in-Charge of the New York Office of the
Federal Bureau of Investigation (“FBI”), today announced charges
against LILIANA TRAFFICANTE of wire fraud and conspiracy to
commit wire fraud in connection with an approximately 5-year
scheme to defraud investors by falsely claiming that investor
money would be used to build a water park for foster children.
TRAFFICANTE instead spent much of the money on personal expenses
and on repaying people who previously gave her money for the
water park project.
TRAFFICANTE, 43, of Manhattan, surrendered to
authorities this morning and is expected to be presented before
United States Magistrate Judge DEBRA FREEMAN in Manhattan federal
court later today.
According to the two-count Complaint:
TRAFFICANTE held herself out as the founder and Chief
Executive Officer of International Dreams, a Manhattan-based
entity. She is also the principal of, or otherwise affiliated
with, a number of entities that appear to be related to
International Dreams, including GoOcean Park and Resort LLC, The
Little Water Park That Could, Bouchville Manors, and Signature A
(collectively, the “Trafficante Entities”). TRAFFICANTE claimed
to be raising money for the purchase of land and completion of a
water park for foster children (the “Water Park Project”).
TRAFFICANTE raised money in various ways, including through
postings on the Craigslist website. TRAFFICANTE made numerous
false statements to individuals in order to induce them to make
loans and/or investments to the Trafficante Entities.
TRAFFICANTE told one individual that land had been
located for the Water Park Project and claimed that the land was
rich with natural resources, the exploration of which could help
fund the Water Park Project. Based on these representations, the
individual loaned $100,000 to one of the Trafficante Entities.
In connection with this loan, the individual and TRAFFICANTE
executed a promissory note that stated that the “purpose” of the
$100,000 loan was to help “GoOcean Water Park & Resort purchase
excavating equipment.” In fact, no land had been purchased by
TRAFFICANTE for a water park, or for any other purpose, and the
money was not used to purchase any equipment. Rather,
TRAFFICANTE made $40,000 in rent payments, among other personal
payments, the same day that the $100,000 was wired to her
In total, TRAFFICANTE induced more than $1 million in
loans and investments purportedly for the water park project.
* * *
TRAFFICANTE is charged with one count of wire fraud and
one count of conspiracy to commit wire fraud. She faces a
maximum sentence of 20 years in prison on the wire fraud charge
and five years on the conspiracy charge. On both counts, the
defendant also faces a fine of the greater of $250,000, or twice
the gross gain or gross loss from the offense.
Mr. BHARARA praised the work of the FBI in the
investigation of this case.
U.S. Attorney PREET BHARARA said: “Liliana Trafficante
allegedly played on people’s good intentions by inducing them to
invest in the building of a water park for foster children, but
that purported investment venture in fact held no water. This
Office, with its partners at the FBI, will continue to pursue
those who would lie and cheat to line their own pockets with
FBI New York Acting Assistant Director-in-Charge GEORGE
VENIZELOS said: “Individuals who make false representations of
charitable intentions will be held accountable for their actions.
Those who donated money in the hopes of funding the Water Park
Project for foster children were betrayed, along with the
children of the community who could have benefitted from the
generous contributions of others. The FBI is committed to
tracking down anyone who sets out to deceive the unwitting public
in an effort to secure their own financial gain, and to restoring
the faith of those with honest intentions.”
This case was brought in coordination with President
BARACK OBAMA’s Financial Fraud Enforcement Task Force, on which
Mr. BHARARA serves as a Co-Chair of the Securities and
Commodities Fraud Working Group. President OBAMA established the
interagency Financial Fraud Enforcement Task Force to wage an
aggressive, coordinated, and proactive effort to investigate and
prosecute financial crimes. The task force includes
representatives from a broad range of federal agencies,
regulatory authorities, inspectors general, and state and local
law enforcement who, working together, bring to bear a powerful
array of criminal and civil enforcement resources. The task
force is working to improve efforts across the federal executive
branch, and with state and local partners, to investigate and
prosecute significant financial crimes, ensure just and effective
punishment for those who perpetrate financial crimes, combat
discrimination in the lending and financial markets, and recover
proceeds for victims of financial crimes.
The charges contained in the Complaint are merely
accusations, and the defendant is presumed innocent unless and
until proven guilty.
This case is being handled by the Southern District of
New York’s Securities and Commodities Fraud Task Force.
Assistant United States Attorney EUGENE INGOGLIA is in charge of