David Saks: MAN & CO-CONSPIRATOR CHARGED WITH $90+MILLION FRAUD SCHEME

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

MAN & CO-CONSPIRATOR CHARGED WITH $90+MILLION FRAUD SCHEME

Rancho Santa Fe Man and Alleged Co-Conspirator Charged with a Scheme to Defraud Victims Out of More Than $90 Million

U.S. Attorney’s Office September 21, 2012
  • Northern District of California (415) 436-7200
 

SAN FRANCISCO—A federal grand jury in San Francisco indicted James B. Catledge of Rancho Santa Fe, California, and Derek F.C. Elliott, of Orangeville, Ontario, Canada, on September 18, 2012, with one count of conspiracy to commit mail fraud and three counts of mail fraud, United States Attorney Melinda Haag announced. The charges allege a scheme in which Catledge and Elliott fraudulently solicited more than $90 million from investors to build a resort in the Dominican Republic, but the resort never opened.

According to the indictment, Catledge, 45, and Elliott, 42, used a bank loan to purchase an old hotel in the Dominican Republic, which they called the Juan Dolio Resort.

They then began to renovate the hotel and to solicit investments in the resort.

The indictment further alleges that in their sales pitch, Catledge and Elliot failed to tell investors that the full commissions being taken from their investment were approximately 44 percent, that the renovations were underfunded, that investors’ money was being used on other projects, and the returns they promised were unsupportable and could not be achieved.

Catledge and Elliott collected approximately $91.3 million from investors.

Of that amount, they allegedly spent approximately $13.4 million on renovations of the Juan Dolio resort and diverted approximately $68.6 million to commissions and other payments.

The renovations were never completed.

Catledge is scheduled to be arraigned on October 5, 2012, before Magistrate Judge Joseph C. Spero in San Francisco.

A court date has not yet been set for Elliott.

The maximum statutory penalty for each count of conspiracy to commit mail fraud and mail fraud in violation of Title 18, United States Code Sections 1349 and 1341, respectively, is 20 years’ imprisonment, a fine of $250,000 or twice the total loss, and restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Jonathan Schmidt is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Elizabeth Garcia and Christine Tian. The prosecution is the result of a two-year investigation by the FBI.

Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

The United States Attorneys are launching an Investor Fraud Initiative and hosting regional Investor Fraud Summits during the first two weeks of October in Walnut Creek, California; Denver, Colo.; Nashville, Tennessee; Miami, Florida; Cleveland, Ohio; and Stamford, Connecticut. The Walnut Creek summit will take place on October 9, 2012. The primary goal of the Investor Fraud Initiative is to raise public awareness about investor fraud by identifying the types of schemes and schemers prosecuted by the Justice Department, educating investors on ways to protect themselves from becoming victims of fraud, and encouraging individuals to report suspicious activity. Conference participants include all four U.S. Attorneys in California; U.S. Attorneys from Oregon, Washington, Arizona, Hawaii, Alaska, and Texas; and senior officials from the Department of Justice, SEC, FBI, and other financial fraud enforcement and regulatory agencies.

Please note, an indictment contains only allegations against an individual and, as with all defendants, Catledge and Elliott must be presumed innocent unless and until proven guilty.

source: FBI



David Saks



Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • September 21 2012 12:46PM

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