Damian Williams, the US Lawyer for the Southern District of New York, introduced that FRANKLIN RAY pled responsible at this time to 4 counts of wire fraud, together with one rely of wire fraud whereas launched underneath circumstances of bail, and one rely of aggravated identification theft in reference to varied fraud schemes referring to his operation of a trucking enterprise often called CSA Enterprise Options LLC and one other Michigan-based trucking firm. RAY, who was beforehand convicted of wire fraud and financial institution fraud within the Jap District of Michigan and was launched from jail in 2010, pled responsible earlier than United States District Decide Analisa Torres.
U.S. Lawyer Damian Williams mentioned: “As he admitted in courtroom at this time, between June 2020 and April 2022, Franklin Ray engaged in 4 separate fraudulent schemes by mendacity concerning the enterprise operations of his purported trucking corporations, together with two separate PPP frauds and a $40 million Ponzi scheme. Ray continued his crime spree even after he was arrested by federal authorities in March 2022, overtly defrauding buyers in his faux trucking firm of almost $2 million whereas he was on bail following his arrest. Because of the onerous work of the FBI and this Workplace, he’s being held accountable for his serial fraudulent conduct.”
As alleged within the beforehand filed Grievance and Indictment and different courtroom paperwork:
Starting in at the least June 2021, FRANKLIN RAY started to supply buyers a chance to spend money on his trucking and logistics firm, CSA Enterprise Options LLC (the “Truck Funding Scheme”). Particularly, RAY and the buyers entered into contracts pursuant to which CSA Enterprise Options LLC would procure and function a truck in its trucking enterprise for every $20,000 contributed by the investor. RAY instructed buyers that the vans would carry out supply companies for a multinational e-commerce firm and/or a multinational delivery firm and that the buyers could be entitled to 77% of the online revenue of the vans. In actuality, CSA Enterprise Options LLC operated few vans and had minimal revenues from trucking actions. As an alternative, buyers within the Truck Funding Scheme acquired funds from new investments into the scheme or from different sources. After the buyers bought the rights to vans from CSA Enterprise Options LLC, RAY despatched them falsified spreadsheets at common intervals, purporting to indicate the efficiency of their vans in the course of the related interval. RAY finally induced roughly 275 buyers to speculate at the least $40 million and fraudulently claimed to have bought over 2,000 vans with the investments.
RAY additionally pled responsible to finishing up fraudulent schemes to acquire over $1.9 million in government-guaranteed loans designed to supply aid to small companies in the course of the COVID-19 pandemic on behalf of CSA Enterprise Options LLC and one other Michigan-based trucking firm (the “SBA Mortgage Fraud Schemes”). In reference to the SBA Mortgage Fraud Schemes, RAY submitted false data and cast paperwork to the Small Enterprise Administration and business lenders. RAY claimed that these companies engaged in vital trucking enterprise, however that they had minimal revenues and trucking exercise.
Lastly, RAY pled responsible to fraudulently inducing a New York Metropolis-based actual property firm (the “Firm”) to pay $175,000 in startup prices for a three way partnership (the “Be part of Enterprise”) between the Firm and CSA Enterprise Options LLC. RAY misrepresented CSA Enterprise Options LLC and his personal private enterprise expertise to the Firm. Somewhat than pay for startup prices, RAY spent the funds on private bills, together with personal airplane journeys. The Joint Enterprise was by no means fashioned.
RAY was arrested in early March 2022, and a CSA Enterprise Options LLC checking account was seized at the moment. After his arrest, up till his Indictment in April 2022, RAY continued to function the Truck Funding Scheme. RAY hid the actual fact of his arrest and the seizure of the checking account and lied to buyers about why he didn’t make anticipated funds after his arrest. Through the interval after his arrest, RAY opened new financial institution accounts on behalf of CSA Enterprise Options LLC and continued to solicit and settle for investor funds for vans that didn’t exist. Within the post-arrest interval alone, RAY defrauded buyers into paying at the least $1.9 million into his scheme.
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RAY, 51, of Canton, Michigan, pled responsible to 4 counts of wire fraud, together with one rely of wire fraud whereas launched underneath circumstances of bail and two counts of wire fraud affecting a monetary establishment, and one rely of aggravated identification theft. The counts of wire fraud whereas launched underneath circumstances of bail and wire fraud affecting a monetary establishment every carry a most sentence of 30 years in jail. The remaining rely of wire fraud carries a most sentence of 20 years in jail. Aggravated identification theft carries an extra obligatory two-year sentence, which have to be imposed consecutively to another sentence. RAY additionally agreed to forfeit $42,128,912, together with the funds on deposit at a number of financial institution accounts utilized in reference to the fraudulent schemes, together with the first CSA Enterprise Options checking account. RAY additionally agreed to pay restitution to the victims.
The utmost potential sentences on this case are prescribed by Congress and are supplied right here for informational functions solely, as any sentencing of the defendant can be decided by the decide. RAY is scheduled to be sentenced at 11:40 a.m. on July 25, 2023, by U.S. District Decide Analisa Torres.
Mr. Williams praised the excellent investigative work of the Federal Bureau of Investigation.
This case is being dealt with by the Workplace’s Common Crimes Unit. Assistant U.S. Lawyer Matthew Weinberg is in command of the prosecution.
If you happen to consider you’ve been a sufferer of the schemes described above, together with a sufferer entitled to restitution, and also you want to present data to legislation enforcement and/or obtain discover of future developments within the case or further data, please contact Wendy Olsen-Clancy, the Sufferer Witness Coordinator at the US Lawyer’s Workplace for the Southern District of New York, at 866-874-8900 or wendy.olsen@usdoj.gov.