US Attorney Reports Family Members Sentenced On Long-Term Phony ‘Gold Mine’ Investment Schemes

LawFuel – Legal Announcement Service – MICHAEL J. GARCIA, the United States Attorney for the
Southern District of New York, announced that JAMES RUSSO, RITA
RUSSO, from New City, Rockland County, New York, were sentenced
this week on charges related to their participation, over a
period of more than 15 years, in a phony “gold mine” investment
scheme and various internet wholesaler schemes. JAMES and RITA
RUSSO are husband and wife, and ELIZABETH, RUDOLFO a/k/a “Rudy”
and THOMAS RUSSO are their adult children. The sentenced were
imposed by United States District Judge STEPHEN C. ROBINSON in
White Plains federal court.

According to the criminal Complaint and Indictment and
statements made in open court during the defendants’ sentencings,
from at least 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 alleged 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, and promising their victims they would receive a
percentage of the proceeds when the alleged gold mine was
eventually sold.

The RUSSOS used various money-laundering techniques to
conceal their fraud proceeds, including directing victims to send
money via Western Union so that the RUSSOS could more easily
convert those payments to untraceable cash, and using structured
withdrawals from bank accounts to avoid currency-reporting
requirements. In addition, JAMES RUSSO directed that the fraud
payments be sent in the names of his wife, RITA RUSSO, and his
children, ELIZABETH, RUDY, and THOMAS RUSSO, in an effort to
protect his activities from discovery by law enforcement.
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

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-of-date telephones, and still
others received crates of extremely low-end merchandise, far
different in quality and value than the items ordered. 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.

All five RUSSOS pleaded guilty to conspiracy to commit
wire fraud and to wire fraud. Defendant JAMES RUSSO was sentenced
to 72 months of imprisonment on May 20; Judge ROBINSON stated at
the sentencing that he found JAMES RUSSO to be “a heartless and
conniving person who was willing to use anyone and everyone who
crossed his path.” His wife RITA RUSSO was sentenced to 21
months of imprisonment, also on May 20. JAMES and RITA RUSSO
were also directed to forfeit a sum of $3 million, including
their home in New City, New York. RUDY RUSSO was sentenced to 36
months of imprisonment on May 22; ELIZABETH RUSSO was sentenced
to 18 months of imprisonment on May 23; and THOMAS RUSSO was
sentenced to 6 months of home confinement and three years of
probation on May 21.

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.

Assistant United States Attorney MARGARET GARNETT is in
charge of this prosecution.
08-125 ###

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