Las Vegas was the scene earlier this month for a joint announcement by the U.S. Justice Department and the FBI that it had indicted three men for their roles in an alleged $1.5 billion Ponzi scheme. It’s a reminder that investors must remain vigilant when it comes to evaluating any investment opportunities and why advisors are an invaluable resource for doing just that.
“The defendants allegedly preyed on thousands of unsuspecting Japanese victims to enrich themselves by operating a billion-plus dollar Ponzi scheme,” said Assistant Attorney General Leslie R. Caldwell. “This prosecution shows that the Criminal Division will pursue not only those who victimize American citizens, but also those who use the U.S. as a home base to defraud victims abroad.”
Edwin Fujinaga, a resident of Las Vegas and the CEO of MRI International Inc., along with Junzo Suzuki and Paul Suzuki, both of Tokyo, solicited thousands of Japanese residents from 2009 to 2013 offering them the opportunity to invest in a fund managed by MRI, which would buy medical account receivables at a discount, commonly known as factoring.
Investors were told they’d receive a series of interest payments that would accrue over the life of the investment and that would be paid out along with the face value of the investment at the conclusion of the investments’ duration.
That didn’t happen. Instead the trio used the funds raised to lavish gifts and payments upon themselves. In order to keep the Ponzi scheme going they used new funds to pay out early-stage investors.
“Investment fraud and other financial fraud cases are a high priority for the U.S. Attorney’s Office in Nevada,” said U.S. Attorney Daniel G. Bogden of the District of Nevada. “These defendants are accused of using a Nevada corporation to conduct their $1.5 billion fraud scheme and falsely telling thousands of overseas victims that their investments would be safely held and managed by an independent, third-party escrow agent in Nevada. Fraudulent ruses and schemes perpetrated by Nevadans using Nevada corporations and entities will continue to be addressed by this office.”