WASHINGTON – Donald Williams, the mastermind behind a series of business opportunity scams, has been sentenced to 78 months in prison and five years of supervised release. The judge ordered Williams to pay $3.9 million in restitution to victims of the scheme.
Williams pleaded guilty to conspiracy to commit postal and electronic fraud on June 29, 2010. He was arrested in Houston on May 7, 2010, after being formally charged by a federal grand jury in Miami on March 9, 2010. The indictment alleges that Williams and his co-defendants, Silvio Carrano, Patrick Williams, and Gregory Fleming, conspired with third parties in Costa Rica to sell business opportunities to American citizens.
The scheme involved selling opportunities to own and operate greeting card and beverage display stands. The opportunities claimed to provide assistance in establishing, maintaining, and operating the businesses. However, in reality, the companies operated from Costa Rica, making false claims to potential buyers about their US-based operations.
Williams admitted to working for several fraudulent companies, including USA Beverages Inc., Twin Peaks Gourmet Coffee Inc., and Cards-R-Us Inc. USA Beverages began selling business opportunities for owning and operating beverage display stands in 2005. The company rented offices in Las Cruces, New Mexico, to make potential buyers believe the operation was fully based in the US. However, USA Beverages actually operated from Costa Rica.
Twin Peaks Gourmet Coffee Inc., a company based in Florida and Colorado, also sold business opportunities for owning and operating beverage display stands. The company rented offices in Fort Collins, Colorado, to make potential buyers believe the operation was fully based in the US. However, Twin Peaks actually operated from Costa Rica.
Williams also worked for Cards-R-Us Inc., a Nevada-based company that sold opportunities to own and operate greeting card display stands. The company rented offices in Reno, Nevada, to make potential buyers believe the operation was fully based in the US. However, Cards-R-Us actually operated from Costa Rica.
Williams admitted to making numerous false statements to potential buyers of the business opportunities. He and his co-conspirators claimed that the companies had been founded years earlier, had a large number of distributors across the country, and had a history of success. They also posed as references living in various cities across the US, making false claims about their success as business owners.
Through these and other deceitful statements, the buyers of the business opportunities were led to believe they would likely receive significant profits. Williams’s scheme was part of the ongoing government effort to combat business opportunity scams nationwide.
Co-conspirators Stephen Schultz and Dilraj Mathauda have already pleaded guilty in federal court and were sentenced in related cases. Charges against Williams’s co-defendants, as well as Jeffrey Pearson and Sirtaj Mathauda, are still pending.
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Key Facts
- State: Federal
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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