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2010 216(dunning et al)

2010 216(dunning et al)






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    2010 216(dunning et al) 2010 216(dunning et al) Document Transcript

    • Office of the United States Attorney District of Arizona FOR IMMEDIATE RELEASE Public Affairs Thursday, September 30, 2010 MANNY TARANGO Telephone: (602) 514-7456 Cell: (602) 799-8322 VALLEY BUSINESSMEN SENTENCED FOR ROLE IN PONZI SCHEME Man ordered to pay $2,889,492 in restitution for multimillion dollar scheme PHOENIX- Lawrence William Dunning,78, of Highland Beach, Florida, was sentenced Wednesday to 24 months in federal prison and ordered to pay restitution of $2,889,492 followed by three years of supervised release for mail fraud. Additionally, three individuals have been sentenced for their roles in the multi-million dollar Ponzi scheme or other related offenses and two more individuals await sentencing. Each of the individuals had previously pleaded to varying charges including mail fraud, false certification of checks and misprision of a felony. • Phillip Eugene Vigarino, 34, of Anthem, Ariz., was sentenced to 60 days in federal prison, to be followed by three years of supervised release for misprision of a felony. • James Marshall Boyce, 62 of Scottsdale, Ariz., was sentenced to three years probation for false certification of checks. • Robert Kenneth Rehm, 63, of Scottsdale, Ariz., was sentenced to three years probation for misprision of a felony. • Co-defendants Eric Jon Strasser and Paul Jeffrey Meka are scheduled to be sentenced in the near future. “Dunning and his co-defendants are paying a price for enriching themselves at the expense of their investors who fully entrusted them with their money,” said Dennis Burke, U.S. Attorney for the District of Arizona. “Our continued collaboration with the Postal Service, the IRS and the FBI is proving that together we are committed and succeeding in holding people accountable for such schemes.” The Arizona Corporation Commission had previously obtained civil judgments against Dunning and Vigarino for American National Mortgage Partners' ("ANMP") failure, including a $22,000,000 judgment against Dunning. Boyce and Rehm also had previously settled civil claims against them. The scheme was implemented in the following manner: Dunning established Creative Financial Funding ("CFF") to solicit investors to fund "hard money lending." Dunning indicated he hired Phillip Vigarino and Paul Meka as loan officers for CFF. He later assisted Frank Caspare in forming ANMP, but when Frank Caspare's health made him unable to control the daily business of ANMP, Dunning continued to assist with daily operations. The nature of CFF's, and later ANMP's business was making and negotiating loans secured by Arizona real property. These businesses would identify individuals who sought a loan but were unable to obtain a
    • 2 conventional loan due to credit problems. These borrowers were willing to pay an interest rate as high as 36 percent and ANMP would locate investors to fund the loans. The investors' funds would be pooled into one specific loan package and then member-managed limited liability companies ("LLCs") would be formed and investors would be members of the LLC. The investors' funds would be secured by liens on the borrowers' Arizona real property through an "Illinois Land Trust." ANMP would then create an "Illinois Land Trust," whereby the borrower transferred his personal interest in the property to a trust. ANMP would become the trustee of the trust and investors became the beneficiaries of the trust. If the borrower made scheduled payments on the loan funded by the investor, ANMP would make monthly payments to the investor. If the borrower defaulted on the loan funded by the investor, ANMP would foreclose on the borrower's real estate, sell the real estate, and refund the investor's funds. During the course of ANMP's operations, when borrowers defaulted on their loans, ANMP was unable to repay its investors. As a consequence, ANMP paid new investors with old investors' funds to create the illusion of performing loans. Additionally, in an attempt to salvage ANMP's operations, ANMP paid its overhead expenses with new ANMP investors' funds. The Arizona Corporation Commission issued a Temporary Cease and Desist Order to CFF and ANMP. The investigation was conducted by Special Agents of the Internal Revenue Service's Criminal Investigation Division, U.S. Postal Inspection Service and the Federal Bureau of Investigation. The prosecution is being handled by Assistant U.S. Attorney John R. Lopez IV, District of Arizona, Phoenix. CASE NUMBER: CR-07-01390-PHX-MHM RELEASE NUMBER: 2010-216(Dunning et al.) ### For more information on the U.S. Attorney’s Office, District of Arizona, visit http://www.usdoj.gov/usao/az/