Sri Lankan among 6 indicted in New York for alleged $ 50 m swindle

• Defendants forged documents and impersonated US Federal Reserve officials, says United States Attorney’s Office for the Southern District of New York under the Department of Justice
• Cash allegedly laundered in banks of several countries including Sri Lanka     

The United States Attorney’s Office for the Southern District of New York under the Department of Justice this week announced charges against six people including a Sri Lankan identified as Rienzi Edwards, though he is yet to be arrested, for allegedly impersonating Federal Reserve officials to swindle over $ 50 million from investors in the United States and other countries.

According to details published on the Attorney’s Office for the Southern District of New York that give a synopsis of the allegations contained in the indictment notes that from at least June 2013 through August 2016, Rienzi Edwards, Michael Jacobs, Ruby Handler-Jacobs, F.K. Ho, Lawrence Lester, and Rachel Gendreau “orchestrated and executed” a fraudulent high-yield investment program known as the “Cities Upliftment Program,” or CUP. 

The document says defendants allegedly falsely told investors CUP was operated by the New York Fed.  The scheme was allegedly principally designed and operated by Edwards, with the assistance of Jacobs and Handler-Jacobs, and was allegedly marketed to investors around the world through brokers, including Ho, Lester, and Gendreau. 

The defendants allegedly pitched the CUP to investors as a highly exclusive, invitation-only, public-private investment partnership designed to raise capital and generate large returns through a purported “trading program” run by the New York Fed.

The defendants promised investors that the CUP would generate extremely high returns on their investments, in some cases as much as $150 million for every $1 million invested.  The defendants allegedly claimed that half of the returns would be used to help revitalise American cities recovering from the 2008 financial crisis, and that the other half would be returned to the investors at the rate of $1 million per day for 75 banking days, the press statement published on the Attorney’s Office website said.

“Edwards and his co-defendants allegedly concocted and carried out an audacious scam, promising investors exponential returns on investments they claimed were overseen by the New York Federal Reserve and backed by the US Government. In reality, it was all a lie; there was no Government-backed program and no plan to invest, only an alleged plan to steal the investors’ money,” United States Attorney for the Southern District of New York Preet Bharara was quoted as saying in the statement.  

Defendants allegedly tricked victims into investing millions of dollars in the CUP scheme with the use of forged and counterfeit New York Fed documents.

“On numerous occasions, the defendants allegedly sent, or caused to be sent, investment contracts, guarantees, correspondence, and other CUP-related documents printed on what appeared to be New York Fed letterhead and bearing the names and purported signatures of New York Fed officials, including the president, certain board members, and other senior officials of the New York Fed. In addition, Edwards, Jacobs, and Ho, with the assistance of Handler-Jacobs, allegedly pretended to be New York Fed officials during in-person meetings and phone calls with investors to convince them to invest in the CUP,” the indictment document alleges.

“Instead of holding investors’ funds in the purported trust accounts as promised, the defendants allegedly stole the money.  Edwards, Jacobs, and Handler-Jacobs allegedly caused the bulk of the funds to be laundered through various domestic and overseas bank accounts in Hong Kong, Barbados, the United Kingdom, and Sri Lanka held in the names of shell companies that they controlled.  A portion of the proceeds was then allegedly kicked back to the brokers who had recruited the investors.  Altogether, the defendants allegedly stole over $50 million from investors in the United States and several foreign countries,” excerpts of the indictment published on the website alleged. 

Edwards, 55, of Sri Lanka, Jacobs, 64, of Albuquerque, New Mexico, and Handler-Jacobs, 64, of Albuquerque, New Mexico are each charged with one count of conspiracy to commit wire fraud and one count of wire fraud, each of which carries a maximum sentence of 10 years in prison; one count of conspiracy to commit money laundering and two counts of money laundering, each of which carries a maximum sentence of 20 years in prison; one count of conducting monetary transactions in unlawful funds, which carries a maximum sentence of 10 years in prison; one count of conspiracy to impersonate employees of the United States, which carries a maximum sentence of five years; one count of impersonating employees of the United States, which carries a maximum sentence of three years; and aggravated identity theft, which carries a maximum sentence of two years in prison.