Three men were charged yesterday for fraudulent investment schemes operated over the past four years; from 2008 to 2012, they successfully deflected claims they were running Bernie Madoff type deals and managed to nab $15 million from investors.
Peter Liounis, charged with wire fraud; Ruslan Rapoport, charged with conspiracy to commit wire fraud and money laundering; and Roman Tsimerman, charged with money laundering, appeared in court before U.S. Magistrate Judge Marilyn D. Go in Brooklyn.
Liounis and his co-conspirators executed three fraudulent investment schemes, called the Rockford Group scheme, which involved a fake private equity firm allegedly offering 15% returns by investing in plaintiffs’ rights to future recoveries in lawsuits; The General Motors IPO scheme, which involved a fake UBS rep and a false IPO of GM stock; and the Grayson Hewitt scheme, similar to the earlier Rockford scheme.
Liounis solicited investors, using various names like James Weston, for example. During the Grayson Hewitt scheme, an investor actually expressed skepticism about the company and recognized his voice, saying, “I see this as a Bernie Madoff deal.” Liounis claimed that the company was handling copious funds and risked “going away for a lot longer than Bernie did” if they were indeed running a scheme.
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In a series of wiretapped calls, the son of an investor sought the return of his father’s money from Grayson Hewitt. Although the father had some $23,000 left in his account, Liounis falsely alleged the account had been depleted and only contained $3,000. Liounis then sent the father and son a “get well fruit basket.”
The defendants used investor funds to purchase gold, meals, clothing, and other consumer items. Rapoport and Tsimerman assisted in the transportation of gold. Based on bank and financial records, it appears that the Grayson Hewitt scheme resulted in approximately $5 million of losses to investors.
“The defendant Liounis was the chameleon of con men, assuming new identities as to exploit his victims over and over again,” said Loretta E. Lynch, U.S. attorney for the Eastern District of New York. “The defendants stole the savings of hard working individuals and attempted to pacify them with lies.”
U.S. secret service special agent in charge Parr says, “Financial fraud schemes ultimately generate public distrust and lack of confidence in the nation’s financial systems.”
If convicted, Liounis and Rapoport each face a maximum sentence of 20 years in prison, and Tsimerman faces a maximum sentence of 10 years in prison. So far, the charges in the complaint are merely allegations.
This case was brought in coordination with President Obama’s financial fraud enforcement task force, established to wage an aggressive and proactive effort to investigate and prosecute financial crimes. The group includes representatives from a range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement in an effort to improve efforts across the federal executive branch in their investigation of serious crimes.
Bill Singer, Wall Street blogger, is skeptical that the efforts of the task force “will send a message to the underworld and future wannabe fraudsters [who people hope] will be deterred from their nefarious deeds.”
The actions and fate of Madoff for example, whose scheme continues to unravel years later, have not acted as a deterrent at all. Rather, Madoff is used “as a prop to further a new fraud [and sidetrack investors]…some deterrence.”