Adley H Abdulwahab, 35, of Houston, has been convicted by a federal jury for his role in a USD100 million fraud scheme with more than 800 victims across the United States and Canada.
The conviction was announced by United States Attorney for the Eastern District of Virginia Neil H MacBride and Assistant Attorney General Lanny A Breuer of the Criminal Division.
“Today’s quick verdict found Mr Abdulwahab guilty of a USD100 million fraud and stealing the life savings of elderly retirees and hundreds of others who have seen everything they worked years for disappear,” says MacBride. “This case, involving victims in dozens of states, clearly demonstrates that a national fraud case can have real implications to everyday people. That is why we created the Virginia Financial and Securities Fraud Task Force last year to go after national cases that impact ordinary citizens on Main Street as well as Wall Street.”
Assistant Attorney General Breuer, says: “Mr Abdulwahab participated in a USD100 million fraud scheme, cheating more than 800 victims across the United States and Canada. While lying to investors about his education and criminal history, he was off buying fancy cars with their money. Today, a jury let him know that financial crime has consequences, and that investment fraud will not be tolerated.”
On September 7, 2010, a federal grand jury returned an 18-count indictment against Abdulwahab and two other principals of A&O Resource Management Ltd. and various related entities that acquired and marketed life settlements to investors. Today, Abdulwahab was convicted on all counts, including: one count of conspiracy to commit mail fraud, five counts of mail fraud, one count of conspiracy to commit money laundering, five counts of money laundering and three counts of securities fraud. The Court will set the sentencing at a later date. At sentencing, Abdulwahab faces up to 20 years in prison on each count except the securities fraud counts, on which he faces up to five years in prison.
Abdulwahab’s co-defendant, Christian Allmendinger, 39, was convicted by a jury on March 23, 2011. Allmendinger will be sentenced on August 14, 2011. Evidence at Abdulwahab’s trial established that during his involvement with the company, A&O obtained approximately USD100 million from approximately 800 investors, many of whom were elderly.
According to court records and evidence at trial, Abdulwahab was part owner of A&O and was active in the day-to-day management of the companies, as well as in the marketing of A&O life settlement investment products to investors. He and others engaged in a scheme to defraud investors by making misrepresentations about such things as A&O’s prior success, its size and office locations, its number of employees, the risks of its investment offerings, and its safekeeping and use of investor funds. Abdulwahab also lied to investors about having a college degree in Economics, as well as failing to disclose to investors that he previously pleaded guilty to a felony forgery of a commercial instrument in a state court in Texas. Evidence at trial showed that Abdulwahab routinely used investor funds for personal enrichment, including a lavish home, a Ferrari and a BMW.
When state regulators began to scrutinize A&O’s investment products, Abdulwahab and others manufactured a sham sales transaction to “sell” A&O to a shell corporate entity named Blue Dymond and later to another shell corporate entity named Physician’s Trust. However, A&O and Physician’s Trust was still secretly controlled by Abdulwahab and his co-conspirators.
Five individuals have pleaded guilty in connection with the A&O fraud scheme: David White, the former President of A&O; Brent Oncale, former vice president of A&O; Russell E. Mackert, an attorney for A&O; Eric M. Kurz, a wholesaler of A&O investment products; and Tomme Bromseth, an A&O sales agent in the Richmond area.
This investigation was conducted by the United States Postal Inspection Service, Internal Revenue Service, and FBI, with significant assistance from the Texas State Securities Board and the Virginia Corporation Commission. These cases are being prosecuted by Assistant United States Attorneys Michael S. Dry and Jessica Aber Brumberg from the Eastern District of Virginia and Trial Attorney Albert B. Stieglitz Jr, of the Criminal Division’s Fraud Section.
The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force.
President Obama established the Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.
