MANHATTAN (CN) – Over the course of three years, six people who impersonated officials with the Federal Reserve fleeced investors across the globe out of more than $50 million, a newly indictment charges.
Federal prosecutors in the Southern District of New York say the culprits touted their Cities Upliftment Program as an a high-yield, virtually risk-free, trading program run by the Federal Reserve Bank of New York.
Despite promises of “exponential returns,” as high as $150 million for every $1 million invested, officials said the money was simply stolen and laundered overseas.
To give the illusion of exclusivity, Cities Upliftment Program was allegedly marketed as an invitation-only public-private investment partnership. Prosecutors say the individuals behind the scheme entrenched the belief that the program was virtually risk-free by saying the investments would be held in Federal Reserve trusts.
The perpetrators also used forged Federal Reserve documents, including phony letterhead bearing the names and signatures of New York Fed officials, to legitimize the scheme, according to the indictment. Some of the perpetrators even pretended to be high-ranking officials on phone calls with investors, officials said.
“In reality, it was all a lie,” U.S. Attorney Preet Bharara said in a statement. “There was no government-backed program and no plan to invest, only an alleged plan to steal the investors’ money.”
During the run of Cities Upliftment Program from June 2013 through August 2016, prosecutors say funds were laundered through overseas banks in Hong Kong, Barbados, the United Kingdom and Sri Lanka.
Tuesday’s indictment takes aim at Rienzi Edwards, Michael Jacobs and Ruby Handler-Jacobs – the program’s designers – as well as F.K. Ho, Lawrence Lester and Rachel Gendreau, international brokers who marketed it.
Authoities arrested accused ringleader Jacobs at Los Angeles International Airport on Dec. 11, the same day that Handler-Jacobs was arrested in New Mexico.
Lester was arrested in Washington the following day, as was Gendreau.
Edwards, a Sri Lankan native, and Ho, a Singapore native, are still at large.
Edwards, Jacobs, and Handler-Jacobs face up to 20 years in prison on conspiracy to impersonate U.S. employees, money laundering, wire fraud and other charges.
Ho, Lester, and Gendreau face up to 10 years behind bars for identity theft, wire fraud, and other charges.
The defendants face arraignment on Dec. 20 before U.S. District Judge Paul Gardephe in Manhattan.