The schemers are out there.
From the Kings front office to the wholesome Folsom suburbs, the Sacramento area is by no means immune from scammers.
But some of the scams go beyond phony phone calls or duping elderly folks out of their cash. Some of the highest profile scams originating in the region over the past decade have swindled tens of millions of dollars from investors, ethnic minorities and the city’s NBA team.
The most recent Sacramento-based scam broke into national headlines Tuesday, when federal prosecutors charged 50 people across the country for involvement in an alleged bribery scheme in which ultra-wealthy parents spent massive sums of money to get their kids into some of the nation’s top universities.
Behind the near-decadelong scam was William Rick Singer, a former Carmichael resident who funneled bribes through his for-profit college counseling company and his nonprofit foundation. Two Folsom residents, once employed by Singer, are among those facing charges of racketeering conspiracy.
Here are five other recent, major scams from the capital region, in order of the alleged dollar amounts involved. Perhaps unsurprisingly, some of the biggest scams in terms of monetary impact and broad reach have involved people of influence – high-level executives, developers and an alleged Hollywood producer.
Tennis team owner’s Ponzi scheme
Alleged total: At least $50 million
Deepal Wannakuwatte, the former owner of the now-defunct Sacramento Capitals tennis team, was sentenced to 20 years in prison in 2014 after reaching a plea agreement for a scam that defrauded $22 million from one investor alone.
Ron Ashley of San Rafael invested eight figures into Wannakuwatte’s ventures. During his 2018 sentencing, Ashley looked him in the eyes and said: “Deepal, you are a sociopath. You are a liar, a serial liar. A thief, a serial thief.”
Prosecutors accused Wannakuwatte of convicting victims to invest in his West Sacramento medical supply company, International Manufacturing Group, by massively inflating the value of his government contracts. He told investors contracts he had were worth $100 million; in reality, they were worth $25,000.
Prosecutors said the net loss among investors totaled $109 million, while Wannakuwatte in court filings said the actual loss was between $50 million and $80 million.
His scheme resulted in about 150 individual victims, as well as banks and an Indian tribe in Washington state.
Granite Bay developer inflates contracts
Alleged total: $23 million
Disgraced real estate developer Abe Alizadeh of Granite Bay was sentenced last summer to four years and eight months in federal prison and ordered to pay nearly $16 million in restitution for a bank fraud case that started before the 2008 recession.
Prosecutors said that from 2004 to 2008, Alizadeh’s company, Kobra Properties, inflated prices on purchase contracts to drive competition for his business, reporting nearly double the contracts’ actual value in some cases.
Alizadeh’s real estate empire, composed of restaurants including more than 70 Jack in the Box franchises and several TGI Fridays and Sonic drive-in locations, failed with the 2008 real estate market collapse. Prior to that, Kobra had closed escrow on more than 800 pieces of property.
As The Sacramento Bee reported at the time, even Alizadeh’s own defense attorney conceded the real estate magnate used “poor judgment” and engaged in “illegal conduct.”
Authorities say financial institutions suffered $23 million in losses to Alizadeh’s fraudulent practices.
Elk Grove resident preys on Indian Fijian community
Alleged total: $22 million
Vincent Singh of Elk Grove used a Ponzi scheme over a span of three years to cheat nearly 200 Indo-Fijians out of $22 million, and was sentenced in 2014 to more than 15 years in federal prison.
Court documents show that Singh, a Fiji native, took advantage of Sacramento’s Indian Fijian community by taking investments from 190 victims of the tight-knight community, then filing for bankruptcy protection.
This type of case is known as affinity fraud, in which members of identifiable groups (such as ethnic or religious backgrounds), are targeted, typically because they may be vulnerable to a certain type of fraud.
Victims in affinity scams often do not notify authorities, and the scams can often go undetected for years.
Kings exec buys beach homes
Alleged total: $13.4 million
Former Sacramento Kings high-level executive Jeffrey R. David pleaded guilty to wire fraud and identity theft in Sacramento federal court earlier this year after his scheme to invest $13.4 million stolen from the team and its sponsors beachfront property was busted by the FBI and federal prosecutors.
As The Bee first reported in August, David was involved in a money-laundering scheme that allegedly took $9 million from the Golden 1 Credit Union and $4.4 million from Kaiser Permanente Foundation while he served as chief revenue officer for the Kings.
Sources and internal documents obtained by The Bee indicated that the federal investigation began Aug. 14 after a Kings employee who was reviewing computer files found a suspicious file folder named “Turbo Tax.”
Inside that folder was apparent evidence into a shell company called Sacramento Sports Partners, which David created in 2015.
The following summer, that company bought an $8 million oceanside house in Hermosa Beach. Three months later, it pumped $1 million in remodels into that home before listing it for sale at $12.5 million, sources told The Bee. Sacramento Sports Partners bought a Manhattan Beach Condo for $3.4 million 2017, court documents show.
David is scheduled to be sentenced in April.
A $3 billion dollar movie studio? Yeah, right ...
Alleged total: Ordered to pay $3.6 million in restitution.
The case of Carissa Carpenter doesn’t lack for drama.
The would-be movie studio executive pleaded guilty last July in a scheme that swindled investors to buy into numerous bogus real estate ventures. The most grandiose was a planned $3.49 billion development that would include a movie studio, water park and 12,000 homes — to be built on land that Carpenter didn’t own.
A week before the guilty plea, proceedings halted when Carpenter apparently fainted in court. She told a judge she was taking nitroglycerine tablets in extreme dosages after having suffered 11 heart attacks.
Personal health aside, Carpenter falsely claimed to have invested between $67 million and $123 million into the River Islands project in Lathrop between 2004 and 2010, according to a business plan obtained by The Bee in 2013. Prosecutors determined she had fabricated those investments and then lied to the FBI about them, and an investigation by The Bee in 2013 uncovered she had a long history of unpaid bills.
In October 2011, Carpenter proposed a 1.2-million-square-foot movie studio for Stanislaus County that she claimed would create 5,800 jobs. A year later, she proposed building a $2.8 billion movie studio in Dixon.
U.S. Attorney Todd Pickles said Carpenter used the victims’ money toward “extravagant purchases,” including $80,000 in luxury hotel stays.
Carpenter was sentenced last November to 6½ years in federal prison and ordered to pay about $3.6 million in restitution.