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The owner of a Manhattan investment firm used a classic Ponzi scheme to defraud about 60 investors of more than $747,000, Manhattan district attorney Robert M. Morgenthau said Thursday in announcing the indictment of Edwin Rodriguez, owner of Rodriguez's Investment Services Inc.
Morgenthau said that as a result of an undercover sting operation, Rodriguez allegedly agreed to launder over $50,000 in cash that was represented to be the proceeds of crime.
Over the last 10 months, Rodriguez operated an illegal investment business on Post Avenue in upper Manhattan, the district attorney said, allegedly collecting more than $747,000 from customers, many of whom, including several ministers, he had met through the local religious community. In all, despite having no way to repay principal or to make interest payments unless he convinced additional customers to give him money, Rodriguez's combined aggregate obligation to his customers totaled over $1.5 million, prosecutors said.
Rodriguez promised customers outlandish interest rates, up to 100% annually, Morgenthau said, and allegedly deceived his customers by lying to them about his investment experience, his business's legality, and the way that customer money would be invested. IMorgenthau said that Rodriguez told investors that he was a highly-experienced real estate investor, that his business had been fully vetted and approved by the government and was as safe as a bank, and that he would use all invested money to make real estate investments. In reality, Rodriguez, the night manager of a local Hess gas station, had no investment experience whatsoever, his business had not received governmental approval, and none of the money customers invested was used to invest in real estate. Instead, prosecutors said, Rodriguez used investor money for personal expenses, and kept his scam going by using new customer money to make interest payments to his older customers.
An investigator from the district attorney's office met with Rodriguez in an undercover capacity, posed as a potential investor, and invested money. During subsequent meetings, the undercover officer told Rodriguez that the officer ran an illegal business, and asked him whether Rodriguez's services could be used to launder his criminal proceeds. During recorded meetings, Rodriguez allegedly agreed to launder money for the officer, and accepted over $50,000 represented to be criminal proceeds for that purpose. During the meetings, Rodriguez allegedly told the officer to sign a contract with an "X" to help conceal the officer's identity, and described the activity in which they were engaged as "money laundering."
The district attorney's office began their investigation into Rodriguez after a financial institution filed a Suspicious Activity Report.
The district attorney's office has moved to freeze the assets of both Rodriguez and his investment firm. 10-26-05
© 2005 North
Country Gazette
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