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September 10, 2004
Indictment Returned Charging Four Defendants Arrested in FBI Sting Involving Alleged Precious Metals Scam
The United States Attorney's Office for the Northern District of California announced that four individuals were indicted yesterday in a seven count indictment charging the defendants with conspiracy to commit mail and wire fraud, as well as engaging in mail fraud and wire fraud as part of a scheme to defraud Applied Materials, Inc. of Santa Clara, CA, and a Pennsylvania-based precious metals company of more than $2 million in platinum.
In particular, the seven count indictment charges Peter C. Calderone, 36; Fredric Anthony Kendle, 46, of Gardena, California; Sheron Wallace, 39; and Ladi Malloy Tulaner, 44, with conspiracy to commit mail and wire fraud, as well as participating in a scheme to defraud involving the use of wires and the mail, in violation of 18 U.S.C.§§ 371, 1341, and 1343. The maximum penalty is 5 years imprisonment and a fine of $250,000 for the single conspiracy count and a maximum penalty of 20 years imprisonment and a fine of $250,000 for each of the remaining five wire fraud counts and single mail fraud count.
The defendants were originally arrested on August 26, 2004, and charged with a criminal complaint on August 27, 2004. Mr. Calderone made his initial appearance on the criminal complaint on August 27, 2004 before U.S. Magistrate Judge Richard Seeborg, who detained the defendant pending his posting of a $200,000 secured bond. Mr. Calderone was arraigned on the charges in the indictment on September 9, 2004 at 9:30 a.m. before U.S. Magistrate Judge Patricia V. Trumbull and pleaded not guilty to all of the counts. The court set the next status hearing for October 4, 2004 at 1:30 p.m. before U.S. District Judge James Ware. The three other defendants have made their initial appearances before U.S. Magistrate Judge Charles F. Eick in Los Angeles. Mr. Kendle was released on a $20,000 bond and ordered to appear on September 10, 2004 before U.S. Magistrate Judge Charles F. Eick. Ms. Wallace was detained pending her posting of a $200,000 secured bond, and Mr. Tulaner was detained and agreed to be transported to the Northern District of California.
According to the indictment returned by the grand jury yesterday, Messrs. Calderone, Kendle and Tulaner, along with Ms. Wallace engaged in a conspiracy and devised a scheme using mail and wire fraud by falsely posing as an executives of Applied and ordering over $2 million worth of platinum. The conspiracy and scheme involved having a portion of the platinum sent to California and then securing the platinum under false pretenses, once it arrived at the shipping company's office. As noted in the earlier criminal complaint, the FBI had instead caused the package the defendants' believed to contain the partial platinum shipment to be filled with stainless steel plates and a tracking device. In the course of the FBI surveillance of the package, Mr. Calderone was arrested near Livermore and the other three individuals were arrested in Los Angeles, after the package was transported from Livermore to Southern California.
The indictment states that the defendants initiated the scheme by sending bogus emails to Johnson & Matthey, Inc., a precious metals company located in West Chester, Pennsylvania, purporting to place an order for platinum on behalf of Applied. According to the criminal complaint and indictment, the individual posing as the Applied executive claimed in these emails that the platinum was required for use in the fabrication of semiconductors. Defendants allegedly ordered approximately $2.3 million of platinum under these false pretenses.
The prosecution is the result of an investigation by the FBI's Cyber Crime Squad in the San Jose Resident Agency and the Rapid Enforcement Allied Computer Team (REACT) Task Force in San Jose.
The investigation was overseen by the Computer Hacking and Intellectual Property (CHIP) Unit of the United States Attorney's Office. Assistant U.S. Attorney Shashi Kewalramani from the CHIP Unit is prosecuting the case.
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 Christopher P. Sonderby, Chief of the CHIP Unit, at (415) 308-7993, or Administrative Assistant U.S. Attorney Cynthia Caporizzo at (415) 436-6740.
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