Wednesday, November 20, 2019

10 Defendants Charged In Manhattan Federal Court With Running Nationwide Telemarketing Fraud Scheme Targeting The Elderly


Defendants Allegedly Created and Used “Money Sucking Website” to Identify Vulnerable Victims Whom They Then Targeted and Victimized

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, the Special Agent-in-Charge of the New York Field Office of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (“HSI”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of an Indictment charging ANTHONY CHEEDIE, CHAD ALLEN, SHANE HANNA, CAMERON BREWSTER, KEVIN HANDREN, JOSEPH CIACCIO, a/k/a “Joseph Gallagher,” JOSEPH MINETTO, JOSEPH DEPAOLA, a/k/a “Joe Hall,” DERREK LARKIN, a/k/a “Derrek Martin,” and MATTIE CIRILO with conspiracy to commit wire fraud in connection with telemarketing.  LARKIN and CIRILO also are charged with obstruction of justice.  The case has been assigned to United States District Judge Victor Marrero.

Nine of the defendants were arrested this morning.  CHEEDIE, MINETTO, DEPAOLA, LARKIN, and CIRILO will be presented this afternoon in Manhattan federal court before United States Magistrate Judge Sarah Netburn.  ALLEN and HANNA will be presented this afternoon in Phoenix federal court before United States Magistrate Judge Deborah M. Fine.  BREWSTER will be presented this afternoon in Las Vegas federal court before United States Magistrate Judge Elayna J. Youchah.  HANDREN will be presented in Salt Lake City federal court before United States Magistrate Judge Evelyn J. Furse.  CIACCIO will be presented at a later date.
Manhattan U.S. Attorney Geoffrey S. Berman said: “As alleged, these 10 defendants, motivated by greed and the possibility of a quick payday, aggressively targeted the elderly and other vulnerable victims throughout the United States by convincing them to invest their money in various businesses, and then scammed those victims again after pushing them deep into debt.  In reality, allegedly these so-called opportunities were just fraudulent schemes to steal victims’ money, and the so-called ‘debt relief’ only further abused the trust innocent victims placed in the defendants.  Now, the defendants face time in prison for their alleged crimes.”
HSI Special Agent-in-Charge Peter C. Fitzhugh said:  “Those charged in this investigation are purported to have taken advantage of our aging population by posing as telemarketers.  This criminal organization allegedly strategically gave false promises to continue their swindle and get as much money as possible while destroying the lives of their victims.  HSI will not stand by while the elderly, or anyone else, are defrauded out of their hard earned money.  HSI and our law enforcement partners will continue to investigate and arrest those responsible to end their telemarketing scams.  Today, these individuals are done making calls unless they are calling their lawyer.”
Police Commissioner James P. O’Neill said:  “These charges reflect how criminals exploit the elderly and other individuals through telemarking schemes.  I commend the NYPD detectives, our federal partners, and prosecutors of the U.S. Attorney, Southern District, for their efforts and cooperation in this investigation.  Together, we will continue to be relentless in fighting crime that impacts the people we serve wherever, and however, it occurs.”
According to the allegations in the Indictment[1]:
The Business Opportunity Scheme
From at least 2012 until at least November 2019, CHEEDIE, ALLEN, HANNA, BREWSTER, HANDREN, CIACCIO, MINETTO, DEPAOLA, LARKIN, and CIRILO carried out a wide-ranging telemarketing scheme that defrauded hundreds of victims (the “Victims”) throughout the United States, many of whom were over age 70, by selling those Victims so-called “business services” in connection with the Victims’ purported online businesses (the “Business Opportunity Scheme”). 
To perpetrate the Business Opportunity Scheme, certain of the defendants and their co-conspirators sold “services” purporting to make the management of Victims’ businesses more efficient or profitable, including tax preparation or website design services, notwithstanding that many Victims were elderly and did not own a computer.  At the outset of the Business Opportunity Scheme, certain participants employed by a “fulfillment” company sent the Victims electronic or paper “pamphlets” or provided so-called “coaching sessions” regarding these purported online businesses, but at no point did the Victims actually earn any of the promised return on their intended investment. 
In order to perpetrate the Business Opportunity Scheme, the defendants and their co-conspirators engaged in a widespread, coordinated effort to traffic in lists of potential victims, or “leads,” many of whom had previously made an initial investment to create an online business with other participants in the Scheme.  As a general matter, leads were initially generated by sales floors operating in, among other places, Arizona, Nevada, and Utah, including those sales floors operated by ALLEN, HANNA, BREWSTER, and HANDREN.  ALLEN, HANNA, BREWSTER, and HANDREN operated in coordination with several telemarketing sales floors in the New York and New Jersey area, including in Manhattan, and provided lead lists and fulfillment services to other co-conspirators operating those floors, including CHEEDIE, CIACCIO, and MINETTO.  BREWSTER, for example, provided lead lists through a website referred to by BREWSTER and other co-conspirators as the “Money Sucking Website” or “MSW.”  CIACCIO and MINETTO employed several salespeople who sold the so-called business services to Victims of the Business Opportunity Scheme and worked to prevent Victims from receiving refunds on their investments, including DEPAOLA, LARKIN, and CIRILO.
Certain participants in the Business Opportunity Scheme, including ALLEN and HANNA, also told Victims that the Victims had qualified for a government grant, often in connection with starting a small business, and that the Victims should purchase the business services offered as part of the Business Opportunity Scheme as a way to earn money while waiting for the Victim’s grant money to be received.  In truth and in fact, no such government grants existed.
The Debt Relief Scheme
When there were no more services to sell the Victim as part of the Business Opportunity Scheme and/or the Victim had reached the maximum limit on his or her credit cards, the defendants and their co-conspirators effectively refinanced their Victims’ participation in the Business Opportunity Scheme into a new scheme, capitalizing on the Business Opportunity Scheme Victims’ credit card debts by offering to consolidate or settle the Victims’ debt in exchange for an up-front payment (the “Debt Relief Scheme”).  The perpetrators of the Debt Relief Scheme entered into revenue-sharing agreements with certain participants in the Business Opportunity Scheme by which the perpetrators of the Debt Relief Scheme paid certain participants for leads based on a percentage of the sales made to Victims.  In truth and in fact, the perpetrators of the Debt Relief Scheme did not settle or consolidate the Victims’ debt. 
Obstruction of Justice 
In or about January 2019, law enforcement conducted a search of the telemarketing sales floor at which LARKIN and CIRILO were employed.  During the search, law enforcement seized several electronic devices from LARKIN and CIRILO.  Following the search, LARKIN and CIRILO knowingly deleted, and attempted to delete, the data on those devices in an effort to prevent law enforcement from using that data in the instant investigation into the Business Opportunity Scheme.
CHEEDIE, 34, of Jersey City, New Jersey, ALLEN, 41, of Laveen, Arizona, HANNA, 40, of El Mirage, Arizona, BREWSTER, 39, of Las Vegas, Nevada, HANDREN, 37, of Sandy, Utah, CIACCIO, 30, of Hillsdale, New Jersey, MINETTO, 32, of Washington, New Jersey, DEPAOLA, 30, of Hillsdale, New Jersey, LARKIN, 36, of Elmwood Park, New Jersey, and CIRILO, 28, of Elmwood Park, New Jersey, are each charged with one count of conspiracy to commit wire fraud in connection with telemarketing through which they targeted and victimized 10 or more persons over the age of 55, which carries a maximum sentence of 30 years in prison.  LARKIN and CIRILO also are each charged with obstruction of justice, which carries a maximum sentence of 20 years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.  
Mr. Berman praised the outstanding investigative work of HSI’s El Dorado Task Force and the NYPD. 
If you believe you have been a victim of the scheme described above, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney’s Office for the Southern District of New York, at 866-874-8900 or wendy.olsen@usdoj.gov.  You may also report it to Detective Christopher Bastos at 917-480-7167 or christopher.bastos@nypd.org.
 [1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

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