3 convicted in $9.2-million wire fraud scheme
JACKSONVILLE, Fla. – Three businessmen have been convicted of multiple counts of wire fraud involving at least one victim in Jacksonville, the U.S. Attorney's Office announced Friday.
Mitchell Holland, 52 of San Diego, Warren Rosenfeld, 60 of Plano, Texas, and Rondell Scott Hedrick, 50 of Lexington, North Carolina, were found guilty of multiple counts of wire fraud that cost their victims about $9.2 million.
Holland was convicted on nine counts, Rosenfeld was convicted on four counts and Hedrick was convicted on three counts. Each faces up to 20 years in prison on each count.
According to evidence presented during the 12-day trial, beginning in mid-2009, when bank lending was very limited due to the economy, Rosenfeld, Holland, Hedrick and others promoted themselves as specialists in securing and using alternative financing. During that time, individuals throughout the country contacted Holland concerning his ability to arrange for alternative capital financing through his company, Vital Funds, Inc.
Holland claimed that he could arrange for a New Zealand Finance Company (Unistate Investments Savings and Loan Limited) to fund a leased Certificate of Deposit at a branch of Chase Manhattan Bank in the British West Indies. Such a bank did not exist.
The individuals seeking financing were then referred to Hedrick, who would offer to assist in liquidating the leased Certificate of Deposit. In one instance, Hedrick offered a victim in Jacksonville the opportunity to purchase a banking passport that would permit oversees banking with fewer restrictions. Hedrick had no such ability to obtain the banking passport, and simply stole the individual's $29,000.
Rosenfeld, via his corporation, Aster Capital, Inc., represented himself as an individual who reviewed contract documents for Holland and Vital Funds in a quasi-attorney role. Rosenfeld later removed his company's label from various contract documents and Holland and Vital Funds became the main point of contact for the clients seeking alternative financing (Leased Certificates of Deposit, Standby Letters of Credit, Proof of Funds Accounts, and Verifications of Deposit). Rosenfeld prohibited the brokers from allowing the clients to contact him.
Rosenfeld (Aster Capital), Holland (Vital Funds), and Unistate representatives split the initial account arrangement fees provided to an escrow company by the clients. These fees ranged from $300,000 to $625,500. None of the deals ultimately closed, and the clients failed to receive funding or real access to any funded account.
During the scheme, clients lost approximately $9.2 million. Holland and Rosenfeld profited in excess of $1.2 million. The remainder of the money was spread among Unistate representatives, and other brokers/participants.
Unistate Director Juan Hernandez has been charged for his role in this case but remains a fugitive. Unistate representative Christopher Jaijairam, 55 of Yonkers, New York, and Glen Elliott Smith, 40 of New Orleans, previously pleaded guilty for their roles in this scheme. Sentencing hearings for the defendants in this case have not yet been set.
The case was investigated by the FBI.
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