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Financial Crimes
05/08/2013

Con artist sentenced to 3 years in prison for multi-million dollar fraud scheme

PHILADELPHIA — A Texas man was sentenced May 8 to three years in federal prison, to be followed by three years of supervised released, in a fraud conspiracy scheme that stole approximately $4 million from a Venezuelan fishing company. The investigation was conducted by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Paul Bauer, 55, of Dallas, pleaded guilty March 8, 2012, to conspiracy to commit wire fraud and wire fraud. In addition to the prison term, U.S. District Court Judge Petrese Tucker ordered Bauer to pay $936,081 in restitution.

"This con artist believed that he and his co-conspirators could get away with stealing $4 million from an unsuspected foreign entity, and would never be held accountable for their actions. They were wrong," said John Kelleghan, special agent in charge of HSI Philadelphia. "HSI and our domestic and international partners will continue to target individuals who engage in this type of criminal activity."

According to court documents, the Venezuelan fishing company, Pinto-Spinelli Group (PSG), had arranged for funds to be deposited in a PSG bank account in Miami in order to pay a business debt. PSG believed that Bauer and other co-conspirators would conduct a currency exchange and then deposit U.S. dollars in PSG's Miami bank account but, instead, the defendants transferred $4 million of PSG's funds to a bank account at Citizens Bank in Reading, Pa., controlled by a Bauer associate.

The HSI investigation revealed that the multi-million dollar financial fraud had devastating consequences for the unsuspecting victim. Using international wire transfers, Bauer and his conspirators were able to take the funds from the lawful owner almost instantaneously. Bauer diverted the funds from Venezuela, through Panama and New York, to an innocuous appearing domestic bank account in Reading. When Citizens Bank became suspicious, Bauer directed his associates to fabricate a letter to mislead Citizens Bank into releasing the funds. Again, within hours of duping Citizens Bank into releasing the funds, Bauer had successfully diverted hundreds of thousands of dollars of stolen PSG funds to Texas, Florida, Puerto Rico, Germany and Spain.

When Bauer realized that HSI special agents were investigating the case, he attempted to cover up his crime and mislead investigators. Bauer provided false exculpatory statements when interviewed and instructed his co-conspirators to provide false exculpatory information if questioned by HSI special agents. Fortunately, the investigating special agents were not deterred by Bauer's attempts to mislead them, and ultimately were able to return more than $3 million of the stolen funds to the victim.

Bauer's co-conspirators pleaded guilty and were each sentenced last year to five years of probation and required to pay restitution of $936,081.