Andrew Bogdanoff, the founder of Remington Financial Group, was accused of taking part in a $10 million “advance fee” fraud scheme targeting victims looking for investors.
Bogdanoff and five other people were charged in a 33-count indictment announced today by federal prosecutors in Philadelphia. Bogdanoff was charged with money laundering, conspiracy and filing false tax returns.
From 2005 to 2011, Bogdanoff and the five other defendants allegedly persuaded more than 800 people to pay fees of more than $10,000 each to Remington by issuing fake letters of interest stating the investment bank had a lender or vendor seeking to finance a project, prosecutors said in a statement.
The defendants and other Remington employees also told victims that they would get funding once the advance fee was paid. The company would cite problems with the project when financing didn’t materialize, prosecutors said.
The scheme “targeted those victims who were desperate for any type of financing alternatives that would help keep their businesses and their business projects solvent,” George C. Venizelos, an agent with the Federal Bureau of Investigation, said in the statement.
All the defendants face prison terms under nonbinding federal sentencing guidelines if convicted, prosecutors said. None of the six is in custody, and no initial court date has been set, according to prosecutors.
Michael Kimerer, a Phoenix-based lawyer for Bogdanoff, didn’t immediately return a phone message seeking comment on the charges.
“Those who engage in financial fraud strike at the very heart of our nation’s economic system,” Philadelphia U.S. Attorney Zane Memeger said in the statement. “It is incumbent on federal prosecutors to root out and prosecute this illegal activity so that innocent people do not suffer traumatic financial losses.”
The case is U.S. v. Bogdanoff, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).