CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051
BUFFALO, NY–Christopher A. Parris, 42, previously of Rochester, NY, and presently of Lawrenceville, Georgia, who was convicted of conspiracy to commit mail fraud associated to a Ponzi scheme, in addition to to wire fraud involving the fraudulent sale of purported N95 masks in the course of the pandemic, was sentenced to serve 244 months in jail by U.S. District Decide Frank P. Geraci, Jr. Parris was additionally ordered to pay roughly $106-million {dollars} in restitution.
“The schemes for which this defendant was sentenced, together with the purported sale of non-existent medical provides in the course of the pandemic have been outrageous,” stated Principal Deputy Assistant Legal professional Normal Brian M. Boynton, head of the Justice Division’s Civil Division. “The Division of Justice will proceed to work carefully with its regulation enforcement companions to prosecute these liable for all these fraud.”
“Christopher Parris, and his co-defendant Perry Santillo, engaged in an elaborate scheme to defraud tons of of victims out of roughly $115 million {dollars},” acknowledged U.S. Legal professional Ross. “These defendants went to nice lengths to perpetuate their fraud and did so over a considerable time period. This workplace, together with our regulation enforcement companions, dedicated vital sources to analyze this scheme, ensuing within the prosecution of each Christopher Parris and Perry Santillo, who’ve now been sentenced to substantial durations of incarceration for victimizing their harmless shoppers on this Ponzi scheme. As well as, defendant Parris was additionally convicted for his half in a COVID-19 fraud scheme, throughout which he obtained roughly $7.4 million {dollars} by falsely purporting to have N95 masks, made in the USA, that he might sale to numerous medical firms, together with the VA hospital, in the course of the top of the pandemic.”
“Defrauding the residents and corporations of this nice nation is not going to be tolerated in our society. People who take part in such a fraudulent exercise might be examine and prosecuted to the fullest extent of the regulation.” “This defendant exploited a scenario like none different in our current historical past,” stated U. S. Legal professional for the District of Columbia Matthew M. Graves. “Fraud like this, taking part in off fears throughout a pandemic, deserves a major sentence, because the courtroom imposed right now. This sentence must be a warning to anybody who thinks they’ll get away with ripping off the federal government or others throughout a disaster.”
“Mr. Parris’ conduct was misleading and manipulative, finally defrauding customers out of tons of of tens of millions of {dollars},” acknowledged Michael Stansbury, Appearing Particular Agent in Cost of the Buffalo FBI Workplace. “This instance of blatant greed is an affront to each hard-working taxpayer. Scammers are attempting all the things they’ll to defraud individuals of their hard-earned cash, however the FBI is doing all the things we are able to to ensure they don’t succeed. Right this moment’s sentencing is additional dedication that we’ll proceed to work with our companions to guard the monetary well-being of trustworthy, hard-working People.”
“Right this moment’s sentencing ought to give clear warning that the U.S. Postal Inspection Service will aggressively examine and search prosecution of people like Christopher Parris, who swindled traders out of their retirement financial savings and created monetary devastation for therefore many victims,” stated Ketty Larco-Ward, Inspector in Cost of the U.S. Postal Inspection Service, Boston Division. “We are going to proceed to assist and collaborate with our federal regulation enforcement companions to cease those that are engaged in all these schemes.”
“It appears Paris’ multi-million-dollar Ponzi scheme to defraud traders out of their hard-earned money was not sufficient, so he turned his consideration to a multi-million-dollar COVID fraud scheme. There have been no boundaries in Paris’ cons, and nobody individual was secure so long as he was lining his pockets with their cash. Now, with right now’s sentencing, Paris will face justice; placing his scamming days behind him as he spends his time behind bars,” stated Thomas M. Fattorusso, Particular Agent in Cost of IRS-CI New York.
“The pandemic and subsequent distribution of billions of {dollars} in aid funds created novel alternatives for dangerous actors and left VA susceptible to numerous fraud schemes. The vigilance and agility of our brokers helped our workplace forestall the federal government and taxpayers from being defrauded of tons of of tens of millions of {dollars},” stated VA Inspector Normal Michael J. Missal. “We are going to stay proactive in high-risk areas and work with our regulation enforcement companions to cease these schemes earlier than it’s too late.”
“Homeland Safety Investigations particular brokers have sworn an oath to guard the American public, which they continued to uphold in the course of the world well being disaster. Our brokers rapidly reacted to guard People from opportunistic people who exploited a public well being disaster to hurt and deceive others for their very own revenue,” stated HSI New Orleans Particular Agent in Cost David Denton. “This sentencing is a gratifying end result for HSI and our regulation enforcement companions who have been on the forefront of the federal government’s investigation response to COVID-19-related crime.”
The Ponzi Scheme
Between January 2011 and June 2018, Parris conspired with co-defendant Perry Santillo and others to acquire cash by means of an funding fraud, generally often known as a Ponzi scheme. Particularly, in 2007, Parris and Santillo, as equal companions, fashioned a enterprise often known as Lucian Growth in Rochester. Previous to roughly July 2007, Lucian Growth raised tens of millions of {dollars} from traders in Rochester, and elsewhere, by soliciting investments for Metropolis Capital Company, a enterprise operated by Ephren Taylor. In July 2007, Parris and Santillo have been suggested by Ephren Taylor that their traders’ cash had been misplaced. In response, in August 2007, Parris and Santillo agreed to accumulate the belongings and money owed of Metropolis Capital Company. The acquisition proved financially ruinous, with the quantity of the acquired debt far exceeding the worth of the acquired belongings. Taylor was later prosecuted and convicted of working a Ponzi scheme.
Subsequently, Parris and Santillo selected to not disclose the reality to traders that their cash, entrusted to Lucian Growth for funding in Metropolis Capital Company, was gone. As an alternative, Parris and Santillo continued to solicit ever-increasing quantities of cash from new traders in an unsuccessful try and recoup the losses. In an effort to discover potential traders to solicit and defraud, Parris and Santillo bought companies from established funding advisors or brokers who have been seeking to exit their companies. Between roughly 2008 and September 2017, Parris and Santillo, utilizing cash obtained from prior traders, bought the companies of no less than 15 funding advisors or brokers, positioned in Tennessee, Ohio, Minnesota, Nevada, California (5 companies), Florida, South Carolina (two companies), Texas, Pennsylvania, Maryland and Indiana.
The funding choices pitched by Parris and Santillo consisted principally of unsecured promissory notes and most popular inventory issued by numerous entities managed by Parris and Santillo. Potential traders have been supplied an obvious array of funding choices to create the phantasm of a diversified funding portfolio. These funding choices included merchandise issued by purported issuers equivalent to First Nationle Options (FNS), Percipience International Company, United RL Capital Companies, Boyles America, Middlebury Growth Company and NexMedical Options, amongst others. None of those issuers had substantial bona fide enterprise operations or used investor cash within the method and for the needs represented to traders. To the extent that an issuer might have had some minor respectable enterprise actions, it was not worthwhile, and inadequate revenues have been generated to pay traders any returns (not to mention return the principal quantities of their investments).
Through the years, to maintain the Ponzi scheme from being detected, a considerable portion of incoming new investor monies have been depleted by making promised curiosity and different funds to earlier traders. A lot of the remainder of incoming investor cash was utilized by Parris, Santillo and different co-conspirators to finance lavish life of the conspirators, their households and associates; to broaden the scheme by buying funding advisor/brokerage companies to acquire entry to contemporary traders; and to pay working bills – salaries for a gross sales power and administrative workers, workplace rents and associated bills, housing for workers, and curiosity on loans – all of which have been used to maintain the scheme going and keep a façade of respectable enterprise operations.
Little or no investor cash was deployed in productive investments, and when so deployed, the investments yielded meager earnings and weren’t worthwhile, or failed altogether. The Ponzi scheme was headquartered and primarily based out of areas in Rochester, with quite a lot of satellite tv for pc workplaces across the nation. Administrative and banking features have been largely carried out out of Rochester. The conspiracy employed quite a lot of salespeople, together with Parris and Santillo, who traveled across the nation to satisfy with and solicit new traders.
Between January 2012 and June 19, 2018, Parris and Santillo obtained no less than $115.5 million from roughly 1,000 traders. By the point the scheme collapsed in late-2017/early 2018, Parris and Santillo, doing enterprise by means of an array of company entities, had returned roughly $44.8 million to traders as a part of their scheme, however continued to owe traders roughly $70.7 million in principal.
Among the many Rochester space victims of the Ponzi scheme have been the next:
• A resident of Webster, New York, who held a complete asset worth of $94,341.89 with a fictitious firm often known as First Nationle Options (FNS), which, as of Dec. 31, 2017, was in truth nugatory or near nugatory; and
• A resident of Victor, New York, and his spouse, who invested roughly $221,758.67 with FNS and Middlebury Growth. The couple obtained three funds of $2,500 however misplaced roughly $214,258.67.
Parris and Santillo managed tons of of various enterprise financial institution accounts opened beneath quite a few completely different enterprise names at numerous monetary establishments, together with however not restricted to Financial institution of America, Residents Financial institution, Genesee Regional Financial institution and ESL Federal Credit score Union. Santillo and Parris directed and licensed the transactions that occurred within the accounts, together with deposits, withdrawals, examine writing and funds transfers. The varied financial institution accounts have been used to switch cash from one account to a different. Incoming investor cash was routinely transferred by means of a number of accounts earlier than the funds have been lastly spent on no matter objective Parris and/or Santillo licensed. By shifting traders’ funds by means of numerous accounts in numerous entity names, Parris and Santillo have been capable of conceal and obscure the truth that new investor cash was getting used to repay earlier traders, finance the operations of the Ponzi scheme, and fund their life.
Santillo was beforehand convicted and sentenced to serve 210 months in jail.
The COVID-19 Fraud Scheme
Parris additionally pleaded responsible in a case initially charged within the U.S. District Courtroom for the District of Columbia to defrauding the U.S. Division of Veterans’ Affairs (VA), in addition to no less than eight different sufferer firms, in a scheme involving private safety gear (PPE). Between February and April 10, 2020, the defendant, because the proprietor and operator of Encore Well being Group, an organization primarily based in Atlanta, that presupposed to dealer medical gear, supplied to promote scarce PPE, together with 3M-brand N95 respirator masks, to numerous medical provide firms and governmental entities. In these proposals, Parris knowingly misrepresented his entry to, and skill to acquire and ship on time, huge portions of 3M N95 masks and different PPE. The defendant falsely represented that he was capable of acquire 3M N95 masks straight from licensed sources in the USA, when in truth, he had no prepared entry to 3M factories or 3M N95 masks or different PPE, no confirmed supply of provide, and no observe report of procuring and delivering such objects.
For instance, in March 2021, Parris supplied to promote the VA 125 million 3M N95 masks at a price of $6.45 per masks. On this course of, the defendant tried to acquire an upfront cost of $3.075 million from the VA, though he knew on the time that he had no entry to the promised masks or current capacity to ship the promised masks.
As a part of his responsible plea, Parris admitted that, along with trying to defraud the VA, he truly obtained upfront funds totaling roughly $7.4 million from no less than eight shoppers for 3M N95 masks that he knew he had no entry to or current capacity to acquire or ship on time. Parris additionally admitted that the proceeds of the scheme totaled roughly $6,218,525. In whole, Parris sought orders in extra of $65 million for the non-existent PPE gear.
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The sentencing is the results of an investigation by the U.S. Postal Inspection Service, beneath the path of Inspector-in-Cost Ketty Larco-Ward of the Boston Division; the FBI, Buffalo Division, beneath the path of Appearing Particular Agent-in-Cost Michael Stansbury, the IRS, Prison Investigation Division, beneath the path of Thomas Fattorusso, Particular Agent-in-Cost; the U.S. Division of Labor, Workplace of Inspector Normal, Workplace of Investigations – Labor Racketeering and Fraud, beneath the path of Jonathan Mellone, Particular Agent-in-Cost, New York Area, the New York State Division of Monetary Companies, beneath the path of Superintendent Adrienne A. Harris; the Securities and Trade Fee; the VA OIG, beneath the path of Michael J. Missal, Inspector Normal, and HSI, beneath the path of Particular Agent in Cost David Denton of the New Orleans Subject Workplace.
Assistant U.S. Legal professional Richard A. Resnick is dealing with the prosecution within the Western District of New York, and Trial Legal professional Patrick Runkle of the Civil Division’s Shopper Safety Department and Assistant U.S. Legal professional Peter Lallas are dealing with the prosecution within the District of Columbia.
On Might 17, the Legal professional Normal established the COVID-19 Fraud Enforcement Activity Drive to marshal the sources of the Division of Justice in partnership with businesses throughout authorities to boost efforts to fight and stop pandemic-related fraud. The Activity Drive bolsters efforts to analyze and prosecute essentially the most culpable home and worldwide legal actors and assists businesses tasked with administering aid applications to forestall fraud by, amongst different strategies, augmenting and incorporating present coordination mechanisms, figuring out sources and strategies to uncover fraudulent actors and their schemes, and sharing and harnessing data and insights gained from prior enforcement efforts. For extra data on the division’s response to the pandemic, please go to https://www.justice.gov/coronavirus.
Anybody with details about allegations of fraud associated to COVID-19 can report it by calling the Division of Justice’s Nationwide Heart for Catastrophe Fraud Hotline at 866-720-5721 or through the NCDF Net Criticism Kind at: https://www.justice.gov/disaster-fraud/ncdf-disaster-complaint-form.
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