[K]achkar orchestrated a scheme to defraud Westernbank by causing numerous Inyx employees to make tens of millions of dollars worth of fake customer invoices purportedly payable by customers in the United Kingdom, Sweden and elsewhere. Kachkar caused these invoices to be presented to Westernbank as valid invoices. Kachkar made false and fraudulent representations to Westernbank executives about purported and imminent repayments from lenders in the United Kingdom, Norway, Libya and elsewhere in order to lull Westernbank into continuing to lend money to Inyx, the evidence showed. In fact, these lenders had not agreed to repay Westernbank's loan. Kachkar made false and fraudulent representations to Westernbank executives that he had additional collateral, including purported mines in Mexico and Canada worth hundreds of millions of dollars, to induce Westernbank to lend additional funds, the evidence showed. In fact, this additional collateral was worth barely a fraction of that represented by Kachkar.
During the course of the scheme, Kachkar caused Westernbank to lend approximately $142 million, primarily based on false and fraudulent customer invoices. The evidence showed that the defendant diverted tens of millions of dollars for his own personal benefit, including for the purchase of, among other things, a private jet, luxury homes in Key Biscayne and Brickell, Miami, luxury cars, luxury hotel stays, and extravagant jewelry and clothing expenditures.In or around June 2007, Westernbank declared the loan in default and ultimately suffered losses exceeding $100 million on the Inyx loans. According to trial evidence, these losses later triggered a series of events leading to Westernbank's insolvency and ultimate collapse. At the time of its collapse, Westernbank had approximately 1,500 employees and was one of the largest banks in Puerto Rico.In addition, the evidence showed, Kachkar knowingly deposited a $3 million check at Mellon Bank from the purported sale of his private jet. At the time of its deposit, based on the evidence presented, Kachkar knew that the check was worthless. In fact, the defendant agreed to sell his plane to a different buyer. After receiving a provisional credit for the check from Mellon Bank, the defendant wired out all of the provisional credit, including a $1 million wire to Kachkar's personal account in Canada. Upon Mellon Bank's request to reverse this $1 million wire, Kachkar refused to do so, resulting in at least a $1 million loss to Mellon Bank, the evidence showed.
Illinois Accountant Charged with Fraud for Allegedly Misappropriating More Than $65 Million from Individuals and Financial Institutions (DOJ Release)
A criminal Information filed in the United States District Court for the Northern District of Illinois charged Sultan Issa, certified public accountant and the Chief Financial Officer of a group of partnerships, corporations and trusts owned by a Chicago-area family with one count of wire fraud affecting a financial institution. READ the Information https://www.justice.gov/usao-ndil/press-release/file/1128146/download As set forth in part in the DOJ Release:
[F]rom 2007 to 2017, Issa embezzled at least $55 million of the family's assets and solicited at least another $8.8 million from individuals in his personal capacity, claiming he would invest their money in legitimate opportunities, including a luxury auto dealership Issa owned in Burr Ridge, according to a criminal information filed in U.S. District Court in Chicago. Issa used tens of millions of dollars in fraud proceeds to cover personal expenses and to secure fraudulent loans from financial institutions totaling at least $83 million to acquire, among other things, 25 residential properties in Illinois, Montana, Michigan, and Cabo San Lucas, Mexico, two private aircraft, four yachts, approximately 60 firearms, and assorted watches, jewelry and memorabilia, the information states. He used another $15 million in fraudulently obtained funds to pay expenses related to the auto dealership, including the purchase of a showroom, the acquisition of luxury cars, and the salaries of employees, the information states.
On December 12, 2018, California resident Edward Withrow III was sentenced to five months of home detention, five years of probation, and a fine of $10,000 for making false statements to the SEC. Withrow previously pled guilty to making false statements in connection with his 2013 sworn investigative testimony to the SEC relating to questions about who owned approximately 40 million unrestricted shares of Endeavor's stock, and whether former chairman Withrow ever tried to determine who owned those shares.On January 30, 2019, Idaho resident Samuel Brown was sentenced to five months in home detention, three years of probation, and ordered to pay restitution of $22,347. Brown was charged criminally in May 2015 and pled guilty in July 2015 to one count of conspiracy to commit securities and wire fraud and one count of making false statements in connection with his 2013 sworn investigative testimony to the SEC.The SEC's litigation against Withrow, Brown, and another defendant is pending.