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September 12, 2003
The United States Attorney's Office for the Northern District of California announced that Robert E. Vener, age 57 of Napa County, California, was indicted yesterday by a federal grand jury on charges that he and two corporations obtained approximately $50 million through an advance fee scheme. Also indicted were two California corporations, Dynacorp Financial Strategies, Inc. and DFS Credit Corporation which were headquartered in Novato, California. The three defendants were indicted on eight counts of wire fraud in violation 18 U.S.C. § 1343; 14 counts of mail fraud in violation of 18 U.S.C. § 1341; and 10 counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(i).
According to the indictment, the defendants promoted an investment described as advanced funding involving the purchase of healthcare providers'accounts receivables. Healthcare providers included, for example, hospitals, doctors, medical groups, health maintenance organizations, and rehabilitation centers. Investors contributed money in exchange for promissory notes to fund the receivable purchases.
Defendants marketed the investment through intermediaries known as wholesalers to securities brokers in various states. Between February 1, 1998 and June 2000, over 600 investors located in over 30 states and several foreign countries invested or reinvested approximately $50 million in the advanced funding investment.
The indictment alleges that the defendants made false representations to investors and others about the kind of receivables to be purchased with investor funds. The defendants also caused false representations to be made in financial statements concerning the value of receivables purchased. Finally, the indictment alleges that the defendants falsely represented to wholesalers and securities brokers how well the investment was doing in collecting receivables.
The maximum statutory penalty for each count of wire fraud in violation of 18 U.S.C. § 1343 is five years imprisonment and a fine of $250,000 plus restitution. The maximum statutory penalty for each count of mail fraud in violation of 18 U.S.C. § 1341 is five years imprisonment and a fine of $250,000 plus restitution. The maximum statutory penalty for each count of money laundering in violation of 18 U.S.C. § 1956(a)(1)(A)(i) is twenty years imprisonment and a fine of either $500,000 or not more than twice the value of the property involved in the money laundering transaction, whichever is greater.
The defendants have not yet made an initial appearance on the indictment. Defendant Vener is not in custody at this time.
The prosecution is the result of a lengthy investigation by agents of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation. Lawrence J. Leigh is the Assistant U.S. Attorney who is prosecuting the case with the assistance of legal technicians Jessica Chavez and Ji-Yon Yi.
A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can. Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on http://pacer.cand.uscourts/gov.
All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181.
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