• Massive White Collar Fraud Indictment

    Author : White Collar Firm October 25, 2018

    The Manhattan D.A.'s office recently announced another massive indictment in a white-collar fraud probe. Three separate entities and their directors were indicted for a national scheme to obtain around $10 million in financing based on fraud, and then launder the investment through a vast network of business and corporate accounts. The defendants are Newsweek Media Group, Christian Media Corporation, and Oikos Networks, Inc., among others.

    According to documents filed with the court, back in March of 2015, William Anderson was the C.E.O. of Christian Media Corporation. Etienne Uzac was the co-owner and Chairman and IBT Media, and another co-conspirator (as-yet unindicted) was the GM of Oikos. All three defendants cooperated in obtaining loans from banks and other financial institutions to ostensibly buy computer servers that sold for around $150,000.00. In order to get the financing, both Uzac and Anderson overstated how well their respective companies were performing, including producing fake financial statements to various lenders. As part of the scheme, the defendants created a fake auditor, including a website, phone number and email address for ‘Karen Smith' -  a  woman who did not exist. They believed that her inclusion would make the financial statements appear more legitimate.

    The parties also held out Oikos as an independent vendor, who then received around $10 million from the lenders. But, instead of providing the companies with the fancy computer servers, they provided them with significantly less expensive servers and then moved any remaining funds to multiple accounts controlled by all defendants. They are then alleged to have moved the funds through a  series of bank accounts in an attempt to hide where they came from. They used the money for business purposes, although not for the purpose for which they obtained the loan. Rather, much of the money was used to fund the daily operations of their businesses, and even made payments on previously-acquired loans.  The scheme was uncovered and further investigated by the D.A.'s Major Economic Crimes Bureau. As part of the investigation, IBT's offices in Manhattan were raided in January. There are stories that some of the top editors and reports of Newsweek were fired when they started questioning the company's accounts and various connections to Olivet University  - an evangelical Christian college. Uzac claimed that these charges stem from a retaliatory act by D.A. Vance as retribution for the news organization reporting on a  campaign contribution to D.A. Vance by Harvey Weinstein. Attorneys for the defendants also claim that no one lost money and no one was defrauded.

    The defendants have been charged with Scheme to Defraud in the First Degree, Money Laundering in the Second Degree, Conspiracy in the Fourth Degree, and Falsification of Business Records. The individuals charged are scheduled to be arraigned this week.

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