An Ontario man has been indicted in the United States for allegedly being one of the masterminds behind a $30-million international fraud scheme.
James Jeffery, 58, of Belleville, Ont., is charged with multiple counts of mail fraud, wire fraud and conspiracy in relation to a Utah-based investment company, Coadum Capital, according to a news release this week by the Federal Bureau of Investigation. He has yet to make his first court appearance.
Jeffery’s partner, Thomas Repke, 57, of Salt Lake City, Utah, faces the same charges and was arraigned by an Atlanta judge on Monday.
It is alleged that Jeffery and Repke ran the hedge funds company in 2006-07.
According to the FBI, the company attracted more than 100 investors who put in more than $30 million. The company promised the investors that their monthly returns would be around five per cent and that their money was safe because it was protected in “escrow accounts.”
Some investors also received monthly literature that said: “Cash Deposit ALWAYS remains in escrow in your name,” and “Cash Depositor’s principal deposit NEVER at risk.”
But it is alleged that the investments were not actually kept in these protected accounts and as much as $20 million was transferred overseas by the company to Switzerland and the Mediterranean island of Malta. This money was then invested in a number of hedge funds run by a trader based in Malta. During this period, the money did not gain any returns and the original investments were lost.
“This indictment alleges a major international investment fraud scheme that defrauded over 100 victims around the country out of tens of millions of dollars, most of which has been transferred to overseas accounts,” said U.S. Attorney Sally Quillian Yates in a statement. “Those who prey on the investing public in this way will continue to find themselves facing federal felony charges.”
In total, the two men face 22 charges and, if convicted, each could be sentenced to a maximum of 20 years in prison and a fine of up to $250,000.