‘Philanthropy’ Was $11 Million Scam, Jury Says

SAN JOSE (CN) — A grand jury accused a Swiss-American dual citizen of swindling investors of $11 million in a scam he misrepresented as a “quasi-philanthropic project” that would get “corrupt middlemen” out of the trade in gold and “conflict diamonds” from the Democratic Republic of Congo.
     The federal grand jury indictment accuses Fritz Kramer of 11 counts wire fraud and one count of commodities fraud in an eight-year scheme in which investors sent money to his Tanzanian, Zambian and Swiss bank accounts, supposedly to finance exports of gold and diamonds from the DRC to Europe, Asia and the United States.
     Unfortunately for Kramer, the wire transfers were sent through a clearing house in North Carolina, according to the July 21 indictment.
     “Kramer promised investors returns of up to 10 times the amount invested in as short a time as one month,” the indictment states. “Kramer told investors that they were investing in a short-term, quasi-philosophic undertaking in which corrupt middlemen in Africa would be cut out of the diamond export process, providing greater profits to miners in the DRC.”
     But it was all a ruse: “As Kramer well knew, the funds provided by investors were not being used to develop an actual gold and diamond export project, and Kramer and his associates never intended to provide any return on the money that they obtained from investors,” the indictment states.
     About 40 investors have wired $11 million to Kramer’s bank accounts since 2008, and none have received any returns on their investment, the grand jury said.
     Kramer used outlandish stories to keep the money coming, according to the indictment: that he had to pay for his engineering partner’s brain and liver surgeries, that $90,000 was burned up in a car accident, that he had “the need to bribe corrupt African officials,” and, of course, “taxes.”
     He emailed bogus shipping certificates and invoices, allegedly issued by the government, and documents certifying that the gems were not “conflict diamonds,” whose trade fuels the arms trade and war. “The fraudulent documents lulled investors into believing that the export project was legitimate, and provided a basis for Kramer’s ongoing requests for additional investments in the program,” the indictment states.
     He also claimed his business involved the Kimberley Process, a controversial joint government-business effort supposed to certify diamonds as “conflict free,” but Kramer claimed it also could certify gold as conflict-free, though there is no such thing as conflict-free gold, according to the indictment.
     Kramer is in Switzerland, or in “other parts of Europe.” The United States wants all the money he made through fraud, everything he bought with the dirty money, including anything he transferred to a third party.
     U.S. Attorney Brian Stretch did not immediately return a request for comment after office hours Wednesday.

%d bloggers like this: