DA SINI & PARTNERS ANNOUNCE ARREST OF 7 INDIVIDUALS FOR ALLEGEDLY OPERATING AN ADVANCE FEE LOAN SCHEME
Defendants Allegedly Targeted Small Business Owners, Defrauded More Than 35 Victims Nationwide
(HAUPPAUGE, N.Y.) – Suffolk County District Attorney Timothy D. Sini today announced the arrest of seven individuals in connection with an alleged advance fee loan scheme that affected more than 35 identified victims across the country.
The arrests are the result of a more than year-long investigation conducted by the District Attorney’s Office, Federal Bureau of Investigations (“FBI”), U.S. Drug Enforcement Administration (“DEA”), U.S. Treasury Inspector General for Tax Administration (“TIGTA”), New York State Police, NYS Department of Financial Services, NYS Department of Taxation and Finance, Suffolk County Police Department, Suffolk County Sheriff’s Office, Nassau County Police Department and Nassau County Sheriff’s Office. The investigation included the use of court-authorized eavesdropping as well as audits of financial records and physical and electronic surveillance.
“This case involved many disparate complaints from all over the country, and the investigators and prosecutors were able to piece that information together and figure out that this was the same scheme and the same group of people operating under different names,” District Attorney Sini said. “This was a difficult case to even identify, and then the work that we did along with all of our partner agencies to investigate the scheme was tremendous.”
The alleged criminal enterprise and boiler room operation was led by Demetrios Boudourakis, a/k/a “Jimmy,” 45, of Farmingdale. Boudourakis is charged with Grand Larceny in the Second Degree, a C felony; four counts of Grand Larceny in the Third Degree, a D felony; two counts of Money Laundering in the Fourth Degree, an E felony; and Scheme to Defraud in the First Degree, an E felony.
Johnson Joseph, 38, of Brentwood, is charged with two counts of Grand Larceny in the Third Degree, Money Laundering in the Fourth Degree, and Scheme to Defraud in the First Degree.
Christopher Looney, 21, of Bethpage, is charged with Grand Larceny in the Third Degree and Scheme to Defraud in the First Degree.
Nadim Afzali, 30, of Hicksville; Tanya Balbi, 39, of Farmingdale; Jude Brun, 36, of Elmont; and Michelle Soccodato, 31, of Hicksville, are each charged with one count of Scheme to Defraud in the First Degree.
The investigation revealed evidence that Boudourakis and his co-conspirators have allegedly operated an advance fee loan fraud scheme since as early as October 2016 in which the defendants offer loans to their targets in exchange for advance fees, and then collect the fees without providing the loans. To date, the scheme has generated stolen proceeds in excess of $2 million.
The conspiracy targeted small businesses and operated as a boiler room, typically reaching victims through cold calling and then using high-pressure sales tactics to sell them the fraudulent loans.
“This criminal enterprise has had devastating impacts on the identified victims,” District Attorney Sini said. “What the perpetrators did here was they used the internet and other tactics to identify vulnerable individuals who were recently denied a loan, usually because they had a bad credit score, and then offer them an opportunity, but that opportunity came at a high cost.”
The defendants would also allegedly utilize check cashing establishments to launder the advance fees, which were usually paid through cashier’s checks, wire transfers or other designated forms of payment, and convert them to cash. Once the fees were converted to cash, the defendants would cease contact with the victims.
From 2016 through early 2018, Boudourakis allegedly operated the scheme out of a boiler room located at 535 Broadhollow Road in Melville. In May 2018, Boudourakis vacated that location and re-established his illicit operation at a storefront located at 3430 Merrick Road in Seaford under the name “Federal Business Lenders.”
The defendants also operated this scheme through shell companies and under other business names, including Federal Business Funding, JTT Funding, JTT Global Holdings, Inc., Acceleration Capital Group, Blackrock Funders, Inc., and Blackrock, Inc.
“These individuals weren’t stealing from the rich; they were stealing from small businesses and ordinary people,” District Attorney Sini said. “What we’re asking the public to do is be vigilant. If something seems too good to be true, it is. Do your research before you send money to any type of company or corporation and be skeptical of advance fees and interest payments. If you believe you are a victim who has been defrauded by these defendants, we are asking you to please contact my office.”
Pursuant to the investigation, law enforcement agents executed search warrants at several locations in connection with the scheme on June 11 and June 12, including Federal Business Lenders, located at 3430 Merrick Road in Seaford; Boudourakis’ residence, located at 148 S. Front Street in Farmingdale; a residence located at 41 James Street in Hicksville; a storage unit located at 305 Del Drive in Farmingdale; and a storage unit located at 47 Broadhollow Road in Melville. The search warrants resulted in the recovery of electronic equipment, three handguns, a sawed-off shotgun and a pill press.
If convicted, Boudourakis faces a maximum sentence of up to 44 years in prison.
If convicted of the top count, Joseph and Looney each face a maximum sentence of two and one-third to seven years in prison. Soccodato faces a maximum sentence of two to four years in prison. Afzali, Balbi and Brun each face a maximum sentence of one and one-third to four years in prison.
“As alleged, Demetrios Boudourakis operated a boiler room-style scheme by selling fraudulent loans to small businesses throughout the country. Promising victims they would receive a loan after advanced fees were paid, Boudourakis and his coconspirators took the money up front, but when it came time to pay up, communication went cold. Today’s charges highlight our commitment to detecting financial crimes of all kinds, and protecting those victims who lose their hard-earned money at the hands of those looking to make an easy profit,” said William F. Sweeney Jr., Assistant Director in Charge of the FBI’s New York Division.
“It’s always a benefit to our communities when local, state, and federal partners work together. The men and women who worked on this investigation are to be commended for uncovering this illegitimate enterprise, and for holding accountable those who have victimized hard-working small business owners,” said Raymond Donovan, Special Agent in Charge of the DEA’s New York Division.
“The scams for which the defendants have been arrested have the potential to undermine the public’s trust in our Nation’s tax administration system,” said J. Russell George, Treasury Inspector General for Tax Administration. “Their arrests should serve as a warning to others that these misdeeds will be aggressively pursued.”
“Predatory lenders who scheme and defraud our communities will be identified and arrested. This investigation is another example of a successful interagency cooperation, leading to the removal of scam artist who defrauded the public. The New York State Police will continue to work relentlessly with our federal, county, and local law enforcement partners to thwart people who prey on the citizens of Long Island with this type of purposeful fraudulent activity,” said Major David Candelaria, New York State Police Troop L Commander.
“This criminal activity victimized small businesses, which play a significant role in the New York State economy, putting them at risk of financial distress and potential failure,” said Acting Department of Financial Services Superintendent Linda A. Lacewell. “DFS is proud to have worked with the Office of the District Attorney to bring these criminals to justice.”
“These individuals preyed upon and pushed victims into fraudulent loans and never delivered what was promised – taking advantage of small business owners trying to get ahead,” Suffolk County Police Commissioner Geraldine Hart said. “The department will continue to work with the Suffolk County District Attorney’s Office and all of our law enforcement partners to bring justice to victims defrauded of their hard-earned money.”
“A complex case such as this highlights the benefit of a multiagency response, each contributing specialized resources,” said Suffolk County Sheriff Dr. Errol Toulon, Jr.
“Today’s announcement of the arrests of seven defendants for this advance fee loan fraud scheme and the investigation which commenced over a year ago shows the extensive collaborative effort of all of the associated law enforcement agencies. Without this interagency cooperation, these defendants would have continued to prey on unsuspecting victims across the country. I would like to congratulate all of the investigators for their dedication and would like to encourage other victims to come forward and contact law enforcement if you believe that you have been a victim of any crime,” said Nassau County Police Commissioner Patrick Ryder.
District Attorney Sini urges anyone who believes they might have been a victim of Boudourakis and his associates to contact the District Attorney’s Office at 631-853-5602 or via email at InfoDA@suffolkcountyny.gov.
This case is being prosecuted by Assistant District Attorney Dina Cangero, of the Financial Investigations and Money Laundering Bureau.
A criminal charge is merely an accusation and the defendant is presumed innocent until and unless proven guilty.