30-year sentence for scammers who victimized Filipinos
RIVERSIDE—State officials announced the sentencing of two men to more than 30 years in state prison for stealing more than $8 million from elderly and Filipino victims through an illegal pyramid scheme and phony stock sales.
Attorney General Kamala Harris said 64-year-old Tennessee native James Sweeney and 35-year-old Canyon Lake resident Patrick Ryan were found guilty of 65 counts of grand theft and securities fraud and sentenced to 33 years and 31 years in state prison, respectively, in Riverside County Superior Court on Thursday.
Both men were ordered to pay restitution of approximately $8.2 million.
In a statement the Department of Justice said more than 1,000 Californians were taken in by the duos fake online shopping hub to purchase goods and services at discounted prices from big-name retailers including, Sears, Target and Macy’s.
Many of the victims were elderly and most were people of Filipino descent who spoke English as a second language, according to court records obtained by the Riverside Press Enterprise.
Defense attorneys for Sweeney and Ryan said they plan to appeal the verdict, the Press Enterprise reports.
The DOJ said the two men operated Big Co-op and Ez2Win.biz, on-line commerce sites where consumers could purchase goods at a discounted price from retailers.
From 2005 to 2006, Big Co-op generated $1.2 million in revenues through an illegal pyramid scheme. According to the DOJ, consumers were informed that if they purchased a Big Co-op membership, they could save money on their own purchases plus earn commissions and rewards by convincing others to shop at the site.
“In reality, consumers never received rebates or rewards. Instead, their monetary gains were based on recruiting others to purchase memberships, and having those purchasers recruit others to purchase memberships (and so on),” said officials from the DOJ.
In addition to the pyramid scheme, the two sold phony stocks in Big Co-Op.
The two men travelled across California seeking investors through seminars and meetings.
“Sweeney and Ryan pitched Big Co-op as the future of online commerce, compared it to Google and EBay, and falsely informed investors the company was turning huge profits,” DOJ officials said. “Investors were also told that an initial public offering (IPO) was imminent and that when the company went public, the stock would double or triple and their investment could climb to well over $100 per share.”
“In reality, Big Co-op was never profitable, there was not an impending IPO, and the only significant revenue generated was as a result of the sale of phony stock and the payment of membership fees for the pyramid scheme,” DOJ officials added.
The scheme took in more than $7 million. The men then used those funds to fund a lavish lifestyle purchasing homes, country club memberships, several luxury cars, a $23,000 wedding ring and a $100,000 wedding, among other “whimsical expenses.”
The state attorney general’s office began looking into the company in 2007 after receiving numerous complaints.
