The operators of a pyramid scheme which took in approximately $27 million from roughly 500 victims, most from the Cambodian-American community, have been sentenced to prison terms of 35 years and 20 years apiece.Hon. Richard G. Stearns, of the U.S. District Court for Massachusetts, sentenced JAMES BUNCHAN, age 57 of Quincy and Attleboro, Massachusetts and North Miami Beach, Florida to 35 years in federal prison and BUNCHAN's wife, SENG TAN, age 61, of Quincy and Attleboro, Massachusetts and Burnsville, Minnesota, to 20 years in federal prison. The two were convicted of conspiracy, mail fraud and money laundering.
"The defendants ran a large pyramid scheme that preyed primarily on ethnic Cambodians," stated U.S. Attorney Sullivan. "The victims are hard working people who were led to believe that they were making safe and responsible investments. Sadly a number of these victims are now facing the loss of their homes and financial ruin."
"IRS CI will vigorously investigate individuals who defraud others in this manner," stated Douglas Bricker, IRS Special Agent in Charge. "This type of crime impacts not only the government but also the victims who believed they were making responsible investments. The prosecution of individuals who are involved in these types of schemes serves as an example that complex financial transactions will be investigated by the IRS and those who violate the law will be brought to justice."
The evidence at trial showed that BUNCHAN, TAN and a third individual, CHRISTIAN ROCHON, age 54, of Warwick, Rhode Island were principals of two companies, WMDS, Inc., a/k/a World Marketing Direct Selling Inc., and One Universe Online Inc., also known as 1UOL. The companies had offices based in Canton, Attleboro, and Boston, Massachusetts.
From October 2000 through November 2005, BUNCHAN, TAN, and ROCHON solicited investments in WMDS and 1UOL and took the investors' money for their own personal use. BUNCHAN, TAN and ROCHON falsely represented that WMDS and 1UOL were companies that marketed and distributed health supplements and other consumer products. They promised investors that a lump sum investment (typically in units of approximately $26,000) would yield a monthly payout ($300 per $26,000 invested) for the rest of the investors' lives and the lives of the investors' children. BUNCHAN and TAN often solicited higher lump sum investments by promising higher returns to large investors.
In many instances, BUNCHAN and TAN persuaded investors to mortgage their homes to get money to invest. In particular, they preyed on ethnic Cambodians living in various communities around the United States, gaining their victims' trust by emphasizing their shared experiences during the genocidal Pol Pot regime in Cambodia.
In pronouncing sentence, Judge Stearns, noted the enormity of the harm inflicted by BUNCHAN and TAN. By encouraging victims to mortgage their homes, the fraud not only stripped hard-working families of their savings but, in many instances, left them homeless.
At first, BUNCHAN, TAN and ROCHON made the promised payments, leading the original investors to unwittingly recruit additional victims of the scam. But, for the most part, the defendants simply spent the money. BUNCHAN used the investors' money to finance a lavish personal lifestyle which included luxury cars, trips to Las Vegas and the Bahamas, and over 6 million dollars gambling at casinos. TAN and ROCHON also profited from the scheme.
As the scheme collapsed, BUNCHAN, TAN, and ROCHON stalled investors by claiming that payments had been delayed due to technical problems. Then BUNCHAN orchestrated a campaign to intimidate investors -- including threatening lawsuits -- to keep them from going to the authorities. At the sentencing hearing, the prosecutor noted that BUNCHAN ultimately went further, attempting to hire a hit-man to murder potential witnesses. BUNCHAN has been charged separately for that scheme.
ROCHON will be sentenced separately. A hearing date for ROCHON has not yet been set.
No comments:
Post a Comment