Lankan investment banker faces charges in US court
US authorities this week filed indictment in a Washington court against six persons including Sri Lanka’s Rienzi Edwards on charges of swindling investors to the tune of over US$50 million, but the Colombo- based investment banker has vigorously rejected the accusations.
“In the first place, no one has informed me from the US or the US embassy (here) of these charges. Furthermore I am (only) an investment banker and advise clients (from many parts of the world). Investment bankers don’t invest,” he told the Business Times in a telephone response on Thursday. 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 with the news on Wednesday 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. On Friday, asked whether he would respond, if any, to the summons to appear in a US court and whether his lawyers would intervene, he said: “Yes, my USA lawyers will definitely intervene and I will do whatever my lawyers advise me to do with regards to going to the USA, etc. I will comply by the law to the letter.”
The indictment is contained in the US Government Justice department website: https://www.justice.gov/usao-sdny/pr/ manhattan- us- attor ney- announces-charges-against-six-individuals-international-high
The US embassy, asked whether extradition proceedings would be sought against the Sri Lankan investment banker, said the embassy does not comment on ongoing investigations.
Mr. Edwards has extensive real estate assets in Sri Lanka, owns a group of boutique hotels here and is connected to several powerful present and former ministers. He is owner of the former Asha Central property down Horton Place and is in negotiations to invite an interna- tional chain hotel there, in addition to being a race horse owner. He is listed in his website as a philanthropist.
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 said on Thursday that the case was subsequently withdrawn in the Magistrate’s Court in December 2015.
He said he was made aware of the US charges only after the Business Times on Thursday 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. 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 announcement said that Mr. Bharara along with other US federal agents had filed an indictment charging
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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.
“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,” Mr. Bharara, regarded as the Justice Department’s most powerful prosecutor, has 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,” the indictment read.
It said 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, Handler-Jacobs, Lester and Gendreau were arrested separately in the US while 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 US, which carries a maximum sentence of five years; one count of impersonating employees of the US, 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 Washington, and Gendreau, 46, of 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 US, which carries a maximum sentence of five years; and one count of impersonating employees of the US, which carries a maximum sentence of three years.
In October 2011, Rajaratnam, a Sri LankanAmerican 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.