Purported Loan Broker Indicted for Advance Fee and Prepaid Interest Fraud Schemes

 

Nicholas Del Franco Defrauded Over a Dozen Potential Borrowers of Over $5 Million in Sham Loan Deals Between 2023 and 2026

Earlier today, at the federal court in Central Islip, an indictment was unsealed charging Nicholas Del Franco, the owner and operator of purported financial services companies in New York and California, with seven counts of wire fraud, in connection with numerous overlapping advance fee and prepaid interest fraud schemes targeting businesses, real estate developers, and individuals in search of financing.  Del Franco was arrested this morning and is being arraigned this afternoon before United States Magistrate Judge Anne Y. Shields.

Joseph Nocella, Jr., United States Attorney for the Eastern District of New York, and James C. Barnacle Jr., Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the charges. 

“As alleged, Del Franco engaged in years-long overlapping schemes designed to steal millions of dollars from borrowers who believed they were paying required fees and upfront interest to secure loans,” stated United States Attorney Nocella. “Now that his repeated lies are exposed, Del Franco will be held accountable for his egregious conduct, and his victims will see some measure of justice.”

"Borrowers deserve transparency and honesty when entering into loan agreements, not deception and fraud. Nicholas Del Franco allegedly exploited the lending process for personal gain, and the FBI will continue to investigate those who seek to undermine our financial system," stated FBI Assistant Director in Charge Barnacle.

As set forth in the indictment and other filings, from approximately November 2023 to the present, Del Franco, the owner and operator of Quattro Capital LLC and Ares 2811 Corporation, engaged in advance fee and prepaid interest fraud schemes targeting prospective borrowers in search of financing.  His victims, over a dozen of whom have been identified to date, included businesses, real estate developers, and individuals.  As part of these schemes, Del Franco falsely claimed to be a legitimate loan broker with access to substantial funding sources and lines of credit, including banks and private lenders, and purported to offer prospective borrowers multi-million-dollar loans with highly attractive terms for construction, real estate development, and business expansion. 

These schemes included: (1) a line of credit advance fee scheme, whereby Del Franco falsely claimed to have access to a $100 million line of credit from a financial institution insured by the Federal Deposit Insurance Corporation, to which prospective borrowers would be given full access in exchange for an upfront escrow payment of $5 million; (2) a “family office” funding prepaid interest scheme, whereby Del Franco falsely claimed to represent a wealthy family whose “family office” was seeking to extend multi-million dollar loans for various construction and infrastructure projects, but required borrowers to make an upfront payment of a percentage of the full loan amount as prepaid interest; and (3) a private investors prepaid interest scheme, whereby Del Franco falsely asserted that he represented several wealthy private investors seeking to fund multi-million dollar loans for construction and infrastructure projects, but required borrowers to make an upfront payment of a percentage of the full loan amount as prepaid interest. 

In each scheme, Del Franco fraudulently induced the victim borrowers to pay him money purported to be advanced fees or prepaid interest before receiving the promised loan.  After the prospective borrowers paid the upfront funds, however, the loans and access to lines of credit never materialized.  Instead, Del Franco stole the money for himself.  In total, Del Franco defrauded over a dozen prospective borrowers of more than $5 million in connection with his schemes.

The charges in the indictment are allegations and the defendant is presumed innocent unless and until proven guilty. If convicted, Del Franco faces up to 20 years’ imprisonment on each of the seven counts. 

If you or someone you know is a victim of this scheme, please call the FBI tip line: 1-800-CALL-FBI (1-800-225-5324).

The government’s case is being handled by the Criminal Section of the Office’s Long Island Division.