Posted on 11/20/2005 10:14:08 AM PST by Calpernia
MAN PLEADS GUILTY TO FEDERAL CHARGES AFTER SWINDLING MORE THAN $24 MILLION FROM LOCAL VICTIMS Phony investment program misled hundreds of South Bay residents
SAN DIEGO – A Chula Vista man pleaded guilty here earlier this week to money laundering and mail fraud charges for his role in a sophisticated investment scam that bilked hundreds of middle and low-income investors out of more than $24 million.
Edmundo Rubi, 47, entered his plea Monday in U.S. District Court. The highly lucrative pyramid scheme involving Rubi, his wife Luisa Rubi, 47, and a third business partner, came to light as a result of a five-year investigation by U.S. Immigration and Customs Enforcement (ICE) and the Internal Revenue Service (IRS).
Investigators say that over a two-year period beginning in 1999, the couple induced 425 people, mostly members of the close-knit Filipino community in the South Bay, to invest in their fraudulent Knight Express program. The investors, who were told their funds would be used to purchase and resell Federal Reserve notes, were promised a six percent monthly return.
The Rubi’s, together with their business partner, Genaro Aquino, 54, attempted to maintain the Ponzi scheme by paying off early investors with money obtained from newcomers, while converting millions of dollars for their personal use. Aquino pleaded guilty to federal income tax violations last month in federal court.
The probe into Knight Express began after a source tipped off investigators about the company’s suspicious activities. Undercover agents subsequently met with Edmundo Rubi and gathered more evidence about the fictitious trading scheme.
Aware he was under suspicion, Edmundo fled the United States. After obtaining a warrant for his arrest, investigators launched an international search. Ultimately, ICE agents tracked Edmundo to the Philippines. Filipino authorities deported Edmundo to Guam where he was arrested by ICE in June 2003.
Edmundo’s criminal sentencing is scheduled for February 2006. His wife pleaded guilty to passport fraud a year ago and was released after serving her prison term.
So far, ICE and IRS investigators have recovered $3.5 million of investors’ money and much of it has been returned to the known victims. The bulk of the money was located in foreign accounts on Guernsey Island in the English Channel.
Agents in San Diego, working closely with the court appointed trustee, are asking anyone who fell victim to this scam to contact the local ICE office at (619) 744-4718.
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NEWS RELEASE
OFFICE OF THE UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF CALIFORNIA
San Diego, California
United States Attorney
Carol C. Lam
For Further Information, Contact: Assistant U. S. Attorney Jason A. Forge (619) 557-7463 For Immediate Release
NEWS RELEASE SUMMARY - November 8, 2004
United States Attorney Carol C. Lam announced that Luisa Rubi pled guilty today to federal money laundering charges arising fromher role in a scheme to defraud investors. Rubi entered her guilty plea in U.S. District Court in San Diego, California, before the Honorable Thomas J. Whelan, admitting to one count of conspiracy to commit money laundering and one count of passport fraud. Rubi, who has been in custody since June 2003, was sentenced today to time served.
According to the plea agreement, between April and June 2002, Luisa Rubi and her husband, Edmundo Rubi, engaged in a series of Western Union money transfers from the Philippines to Chula Vista, California, that were designed to transmit $50,000 to Luisa Rubi, while concealing that the funds were proceeds of a mail and wire fraud scheme that Edmundo Rubi had perpetrated. According to an indictment unsealed on June 10, 2003, Edmundo Rubi operated Knights Express, Ltd., and Djmler Enterprises, Inc. and utilized the businesses to perpetrate a scheme to defraud investors out of more than $25 million.
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In connection with her plea, Luisa Rubi admitted she knew the money transferred fromthe Philippines was derived from the illegal scheme. Luisa Rubi was aware that months prior to the money transfers, federal agents executed search warrants at the Rubis’ residence and the business offices of her husband. In the months that followed the search warrants, Luisa Rubi attended numerous court hearings during which the fraudulent nature of her husband’s business activities was discussed. Luisa Rubi was also aware that Edmundo Rubi was in the Philippines in violation of a court order.
The plea agreement also details how Luisa Rubi knowingly made a false statement in an application for a United States passport. Rubi stated that her previously issued passport had been misplaced, when in truth, as she then knew, her previously issued U.S. passport had been seized during the execution of a search warrant at her residence.
Edmundo Rubi is scheduled to begin trial on April 19, 2005.
This case is the product of a joint investigation by the Internal Revenue Service - Criminal Investigation Division, and the Bureau of Immigration and Customs Enforcement, Department of Homeland Security.
DEFENDANT
Luisa Rubi
SUMMARY OF CHARGES
Title 18, U.S.C., Section 1956(h) - Conspiracy to Commit Money Laundering
Maximum penalty per count: Twenty years; fine of $500,000 Title 18, U.S.C., Section 1542 - Passport Fraud Maximum penalty per count: Ten years; fine of $250,000
AGENCIES Internal Revenue Service - Criminal Investigation Division
Bureau of Immigration and Customs Enforcement - Department of Homeland Security
ICE Ping
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