SL investment banker Edwards denies US claim on fraud

Sri Lankan investment banker Rienzi Edwards on Thursday rejected accusations against him by the US Justice Department of involvement in swindling investors to the tune of over US$50 million.
“In the first place, no one has informed me from the US or the US embassy (here) of these charges. Furthermore I am an investment banker and advises clients (from many parts of the world). I don’t make any investments,” he told TimesOnline in a telephone response in Colombo. He is the second Sri Lankan to be indicted by US Attorney Preet Bharara in recent times, after the high profile 2011 indictment of Raj Rajaratnam.
Colombo and the stockmarket were buzzing on Wednesday with the news that Mr. Edwards and five others had been indicted by the Manhattan US Attorney in an international high-yield investment fraud scheme. They are alleged to have impersonated Federal Reserve officials between June 2013 and August 2016 and swindled over $50 million from investors in the US and foreign countries.
Mr. Edwards said he didn’t know the other accused, four of whom have been arrested. “I don’t know them,” he said.
The indictment is contained in the US Government Justice department website: https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-announces-charges-against-six-individuals-international-high
Mr. Edwards has extensive real estate assets in Sri Lanka and a group of boutique hotels. He is also owner of the former Asha Central property down Horton Place and is in negotiations to invite up an international chain hotel there, in addition to being a race horse owner.
He said he was made aware of the US charges only after TimesOnline sent him a copy of the indictment appearing in the US Justice Department website.
“People were saying there was something against me but I didn’t know about it until now. If I receive any indictment (which I have not got so far) I will respond appropriately (through my lawyers). In the first place this indictment is misplaced because I am only an advisor to overseas clients, not an investor,” Mr. Edwards, who has been accused of being the ring-leader in this fraud, said.
The notice said that Preet Bharara, the US Attorney for the Southern District of New York, Angel M. Melendez, Special Agent In Charge of the New York Field Office of the Department of Homeland Security, Homeland Security Investigations (HSI), and Deirdre L. Fike, Assistant Director in Charge of the Los Angeles Field Office of the Federal Bureau of Investigation, announced the unsealing of an indictment charging six defendants with conspiracy, wire fraud, impersonation of Federal Reserve Bank of New York officials, money laundering, and other crimes in connection with a fraudulent high-yield investment scheme that resulted in the theft of over $50 million from investors in the US and around the world.
Manhattan U.S. Attorney Preet Bharara 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.”
HSI Special Agent in Charge Angel M. Melendez said: “Using forged and counterfeit Federal Reserve documents, these individuals allegedly orchestrated a complex international scheme that cost unwitting investors both here and abroad over $50 million dollars. This indictment shows the great length that criminals will go to steal the money of hard working individuals. HSI is up to the challenge to uncover these schemes and bring the participants to justice.”
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, which the defendants falsely told investors was operated by the New York Fed.  The scheme was principally designed and operated by Edwards, with the assistance of Jacobs and Handler-Jacobs, and was marketed to investors around the world through brokers, including Ho, Lester, and Gendreau.
Jacobs was arrested at Los Angeles International Airport in California on December 11 and was presented in a federal court before a US Magistrate Judge in Santa Ana, California, on December 12.  Handler-Jacobs was arrested in Albuquerque, New Mexico, on December 11, 2016, and was presented in federal court before a U.S. Magistrate Judge in Albuquerque on December 12.  Lester was arrested in Mount Vernon, Washington, on December 12 and presented the same day in federal court before a U.S. Magistrate Judge in Seattle, Washington.  Gendreau was arrested on December 12 in Savanna, Illinois, and was presented in federal court before a U.S. Magistrate Judge in Rockford, Illinois.  Edwards and Ho are currently at large, the notice said.
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.
Ho, 80, of Singapore, Lester, 71, of Mount Vernon, Washington, and Gendreau, 46, of Savanna, Illinois, 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; and one count of aggravated identity theft, which carries a maximum sentence of two years in prison.   In addition, Ho is charged with one count of conspiracy to impersonate employees of the United States, which carries a maximum sentence of five years; and one count of impersonating employees of the United States, which carries a maximum sentence of three years.  
Last year, the passports of Mr. Edwards and his wife were impounded during an FCID Sri Lanka investigation over alleged money laundering charges. Mr. Edwards says the case was subsequently withdrawn in the Magistrate’s Court in December 2015.
In October 2011, Rajaratnam, a Sri Lankan-American former hedge fund manager and billionaire founder of US-based Galleon Group, was found guilty on all 14 counts of conspiracy and securities fraud in  US court and sentenced to 11 years in prison and fined a criminal and civil penalty of over $150 million combined. - Ends -