Eastern District of California Blog

Six Year Prison Sentence In Vassallo Fraud Case

According to the Sacramento Bee, Judge Burrell sentenced Kenneth Kenitzer to six years imprisonment in the "Equity Investments Management and Trading" fraud scheme ran by Anthony Vassallo, who was sentenced last June to 16 years in prison.

Anthony Vassallo Sentenced To 16 Years For Running Ponzi Scheme

Still insisting he was "blindsided" and pressured by prosecutors and his own attorney to plead guilty, Anthony Vassallo was ushered out of a Sacramento courtroom Friday by deputy U.S. marshals to serve a 16-year sentence in federal prison for running a Ponzi scheme that bilked investors out of millions of dollars.

Vassallo, who ranks with the region's premier fraudsters, pleaded guilty to wire fraud on Feb. 1. He then tried to withdraw his plea, claiming his residency in the Butte County jail made it impossible for him to assist in trial preparation.

When that didn't work, he claimed government prosecutors and agents and defense attorney Mark Reichel ganged up on him to extract a guilty plea to a crime he didn't commit.

U.S. District Judge Garland E. Burrell Jr., who branded Vassallo a "liar" at Friday's hearing, wasn't buying that either. The judge had already declared in a court order that Vassallo had no credibility.

The 34-year-old Vassallo, who lived in Folsom before he was jailed, robbed investors of more than $44.8 million and their peace of mind through the use of a classic Ponzi scheme. He and co-conspirator Kenneth Kenitzer raked in more than $80 million from more than 300 investors in less than three years. True to the age-old Ponzi tradition of robbing Peter to pay Paul, he paid back millions to investors to give them a false sense of security and keep the scheme afloat.

Burrell set a hearing for Aug. 23 to determine the amount of restitution Vassallo will be ordered to pay.

Sacramento Bee, 6/22/13

Read more here: http://www.sacbee.com/2013/06/22/5515593/vassallo-aosipdfu-iopsa-duf.html#storylink=cpy

Vassallo Seeks To Withdraw Guilty Plea

Anthony Vassallo, who pleaded guilty to masterminding a $45 million Ponzi scheme out of Folsom, wants to withdraw his plea.

Vassallo was scheduled to be sentenced today in U.S. District Court in Sacramento. Instead, his lawyer Mark Reichel has asked to withdraw Vassallo's guilty plea.

Reichel said Vassallo only pleaded guilty because he believed he couldn't adequately prepare for trial while stuck in the Butte County Jail in Oroville.

 Sac Bee Blog, 5/24/13

Read more here: http://www.sacbee.com/2013/05/24/5446322/man-accused-of-running-folsom.html#storylink=cpy

Vassallo Pleads Guilty In $45 Million Ponzi Scheme Fraud

Pleading guilty in one of Sacramento's biggest fraud cases in years, a Folsom man admitted Friday he ran a Ponzi scheme that cost investors nearly $45 million.

Anthony Vassallo, 33, pleaded guilty to a single fraud charge in connection with his defunct investment firm, Equity Investment Management and Trading Inc. The firm was shuttered by authorities shortly before Vassallo's arrest in March 2009.

Although Vassallo faces a maximum 20 years in prison, prosecutors agreed to recommend a 16-year sentence, according to court papers. Sentencing is set for May 3 in U.S. District Court in Sacramento.

Sacramento Bee, 2/2/13

All Four Defendants In Wacky Strong-Arm Attempt To Recover Folsom Ponzi Scheme Funds Get Probation

A Fair Oaks man who admitted impersonating an FBI agent in order to recover money for victims of a Ponzi scheme was sentenced today to home confinement and probation.

Michael David Sanders, 43, was the fourth and final defendant sentenced in the strong-arm case. He was sentenced to two years' probation and 180 days' home confinement by U.S. District Judge John Mendez.

Prosecutors said Sanders was the ringleader in a bizarre attempt to get investors linked to a Folsom Ponzi scheme to cough up $378,300.16. Sanders' group was working informally on behalf of victims of the Ponzi.

Outfitted with bulletproof vests, ear pieces and other gear, Sanders' group burst into a Folsom office on March 8, 2009, and confronted several of the investors. They announced they were working for the FBI and the Securities and Exchange Commission and demanded they wire the money to a credit union.

Sanders' co-defendants were sentenced earlier. Craig Anderson, 41, or Chicago, Sean Smartt, 42, of Sacramento; and Cassandra Moore, 27, of Beverly Hills; all got two years' probation. Anderson and Smartt got 180 days of home confinement as well.

The Ponzi scheme itself took victims for about $40 million, one of the biggest white-collar crime cases in the Sacramento area in years. Criminal charges are still pending against Anthony Vassallo, the alleged mastermind of the Ponzi.

Sacramento Bee, 9/7/10;[updated story, Sacramento Bee, 9/8/10]

Eight More Indicted In Gililland Fraud Case

Yesterday, the government indicted eight more, including a second Chico home builder, in a fraud scheme with Garret Gililland.  06-17-102ndSSIndictmentGililland:

Weeks after indicting a Chico home builder for fraudulently unloading 62 houses he couldn't sell in 2006, the U.S. attorney's office has expanded the case to a second Chico builder, William E. Baker, for allegedly doing the same with six houses.

Baker and several alleged accomplices, including a Sacramento real estate professional and an Elk Grove woman, were indicted after an expanded investigation into the two home builders' sales operations as the housing boom soured, U.S. Attorney Benjamin Wagner announced Thursday.

Federal authorities have issued arrest warrants. But they said Thursday they are offering the defendants the chance to surrender to the U.S. Marshals Service on Monday.

Sacramento Bee, 6/18/10

4th Guilty Plea In Conspiracy To Impersonate A Federal Officer To Recover Ponzi Scheme Proceeds

A Fair Oaks man accused of taking part in a bizarre scheme to recover money from an alleged $40 million Ponzi ring in Folsom has pleaded guilty to conspiracy to impersonate an officer, federal authorities reported.

Michael David Sanders, 42, was the fourth and final person to plead guilty in the case in which defendants admitted they tried unsuccessfully to recover funds for people who lost investments to the Ponzi ring, according to officials for the U.S. Attorney's office, the FBI and the IRS.

The Ponzi scheme allegedly was carried out by Anthony Vassallo, indicted last April on mail fraud, wire fraud and money laundering. Vassallo has pleaded not guilty.

Sacramento Bee, 2/21/10

Equity Investment Alleged Ponzi Scheme Defendant Kenitzer Agrees to Plead Guilty

The Pleasanton Weekly reports that Anthony Vassallo's business partner, Kenneth Kenitzer, has agreed to plead guilty to mail fraud and money laundering for his role in their Equity Investment Management & Trading, Inc.'s investment fraud. 

For other posts on this case, see Vassallo and Equity Investments posts.

Hero or Criminal?

"Alleged Anti-Ponzi Vigilante is Enigmatic" is the title of the Sacramento Bee's story Sunday about Michael David Sanders, who has been indicted with three others with conspiracy to impersonate federal officers with respect to their purported strong-arm efforts to recover money for investors in the Vassallo/Equity Investments alleged ponzi scheme.  Comments to theSac Bee article are running strongly in favor of hero.

Three More Charged in Vassallo/Equity Investments Fraud Case

The Sacramento Bee yesterday reported that three more were charged with impersonating federal agents in an apparent attempt to recover money for victims of the alleged Equity Investments ponzi fraud scheme in Folsom:

A federal grand jury indicted Craig W. Anderson, Cassandra Moore and Sean Smartt with conspiring to impersonate federal agents, prosecutors said Friday. Also indicted was Michael David Sanders, who was originally charged in March.

The bizarre case grows out of the indictment against Anthony Vassallo of Folsom, who was charged with running a $40 million Ponzi scheme that lured an estimated 150 investors. Vassallo, 29, allegedly promised outlandish returns in his Equity Investment Management and Trading Inc. The firm was shut down earlier this year, and officials said they've been able to recover only $1.2 million.

The new indictment describes an armed confrontation between the Sanders foursome and three people, identified as "hedge fund operators," in Folsom March 8.

The foursome allegedly walked into the office wearing bulletproof vests, earpieces, handcuffs and badges. Anderson and Sanders, who carried guns, said they were from the FBI and Securities and Exchange Commission.  Anderson threatened to handcuff anyone who tried to leave. One of the four, speaking into his earpiece, said there was a "unit in place" at the home of one of the hedge fund operators, according to the indictment.

The group said it had arrived to recover money taken from victims of Equity Investment's scheme. Anderson demanded that the hedge fund operators wire $378,300.16 to a credit union account held by something called the Spirit Foundation, the indictment said. Prosecutor Robin Taylor, an assistant U.S. attorney, said the money was never wired.

Sanders' lawyer, W. Russell Fields, said his client was innocent of any wrongdoing and was merely trying to help the victims.