Two foreign nationals in the Philippines allegedly duped elderly American investors into sending them millions of dollars in an investment scam that included setting up a “virtual” shop in a downtown Chicago office.
Over the phone, Jonathan Papa and Methsiri “Lal” Palliyaguru sold phony investments in certificates of deposit and real estate to nearly 200 people, mostly American senior citizens, according to an indictment returned Wednesday in U.S. District Court in Chicago.
The investors were found through online research of American retirement communities. In some of the calls and promotional materials, both men told investors that billionaire investor Warren Buffett and Berkshire Hathaway were involved in their real estate investments, the indictment said.
Between August 2008 and August 2013, investors paid them about $10 million. The men sent phony account statements to the investors showing their investments were increasing in value, but their money was never invested, the indictment says.
Papa, 43, and Palliyaguru, 57, are each charged with eight counts of mail fraud that victimized 10 or more people over the age of 55. Each count carries a maximum sentence of 30 years in prison. The two men are not in the United States.
A third defendant, Austin Etches, previously pleaded guilty to mail fraud and cooperated with the investigation against Papa and Palliyaguru. Etches, of Toronto, Canada, was sentenced last year to 84 months in prison, officials said.
All three men managed various companies, including one called Bradley Cooper Financial Services. They set up “virtual offices” in or near major American cities, including one at 500 N. Michigan Ave. in Chicago, court records show. They used voice-over-Internet-protocol technology to make it appear their calls from the Philippines were coming from the U.S.
Employees of the companies were not in the offices but instead were working for Papa and Palliyaguru in the Manila area of the Philippines. Once the investors deposited money into U.S. bank accounts, the money was transferred overseas to accounts in China, Hong Kong and the Philippines, according to the indictment.