Financial Fraud: Manoel Antonio Errico Extradited For Defrauding Investors

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Investment Fraud Scheme

<h2 class&equals;"node-title">International Fugitive Extradited To United States To Face Charges Regarding Alleged Cedar Funding Investment Fraud Scheme<&sol;h2>&NewLine;<p class&equals;"node-subtitle center"><strong>Former Monterey-area man accused in multi-million-dollar fraud scheme apprehended in Argentina after nearly seven years<&sol;strong><&sol;p>&NewLine;<div class&equals;"field field--name-field-pr-subtitle field--type-text field--label-hidden"><&sol;div>&NewLine;<div class&equals;"field field--name-field-pr-body field--type-text-long field--label-hidden">&NewLine;<div class&equals;"field&lowbar;&lowbar;items">&NewLine;<div class&equals;"field&lowbar;&lowbar;item even">&NewLine;<p>SAN JOSE &&num;8211&semi; A former Monterey-area man&comma; Manoel Antonio Errico&comma; was extradited to the United States from Argentina on August 23&comma; 2016&comma; to face fraud charges brought against him in September 2009&comma; announced United States Attorney Brian J&period; Stretch&comma; Monterey County District Attorney Dean D&period; Flippo&comma; United States Postal Inspection Service Inspector in Charge Rafael Nuñez&comma; and Federal Bureau of Investigation Special Agent in Charge John F&period; Bennett&period;<&sol;p>&NewLine;<p>In a federal indictment returned on September 8&comma; 2009&comma; Errico&comma; 62&comma; is accused of defrauding investors in Cedar Funding&comma; a Monterey-based &OpenCurlyDoubleQuote;hard money” lender&period;  Errico allegedly induced victims to invest in loans purportedly secured by deeds of trust and in a fund that invested in those same loans&period;  According to the thirty-one count indictment&comma; Cedar Funding had more than 1&comma;000 investors while in existence&period;<&sol;p>&NewLine;<p>The indictment describes various ways in which Errico allegedly defrauded investors by inducing them to purchase fractional interests in loans secured by deeds of trusts&comma; and shares of Cedar Funding <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;category&sol;mortgage&sol;" title&equals;"Mortgage" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"64">Mortgage<&sol;a> Fund&comma; LLC&period;  According to the indictment&comma; Errico engaged in a scheme&comma; plan and artifice to defraud his targets&comma; failed to disclose material facts&comma; and made materially false statements&period;  Specifically&comma; the indictment alleges that&comma; among other things&comma; by using documents provided to investors&comma; advertisements&comma; interest payments and verbal communications&comma; Errico participated in creating the false and misleading appearance that the investors’ funds were invested in sound&comma; secured real estate loans&comma; which offered high returns and safety of principal&period;  In truth&comma; by in or about 2004 and increasingly thereafter&comma; most of the loans were not performing&comma; and the investors’ funds were not secure&period;  Moreover&comma; as borrowers increasingly failed to pay off loans&comma; Errico&comma; without the investors’ prior knowledge or consent&comma; allegedly participated in extending the <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;category&sol;loans&sol;" title&equals;"loan" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"219">loan<&sol;a> maturity dates and advanced more investor funds&comma; which caused the loan balances to balloon beyond the initial loan amounts&comma; diluted the investors’ fractional interests in the loans and increased the likelihood that they would lose some or all of their principal&period;<&sol;p>&NewLine;<p>The indictment also alleges that&comma; unknown to investors&comma; the source of a substantial part of the interest that Errico caused Cedar Funding to pay to existing investors came from new investors’ funds rather than from performing borrowers&period;<&sol;p>&NewLine;<p>Errico was arrested in April 2016 when he traveled from his home country of Brazil to Argentina&period;  He was arrested by Argentine authorities based on an Interpol &OpenCurlyDoubleQuote;Red Notice” that had been submitted by the United States&period;  The United States thereafter made a formal extradition request to Argentina&comma; and on August 1&comma; 2016&comma; the Argentine authorities ordered Errico extradited to the United States&period;<&sol;p>&NewLine;<p>After being extradited&comma; Errico made his initial appearance in federal court in San Jose on September 1&comma; 2016&comma; before U&period;S&period; Magistrate Judge Howard R&period; Lloyd&period; On that date&comma; Judge Lloyd conducted a bail hearing and ordered that Errico be detained pending trial&period;  The defendant’s next scheduled appearance is September 19&comma; 2016&comma; before U&period;S&period; District Judge Edward J&period; Davila&period;<&sol;p>&NewLine;<p>Errico is named in each of the thirty-one counts alleged in the indictment&period;  The charges and maximum statutory penalties for each count in the indictment are as follows&colon;<&sol;p>&NewLine;<blockquote>&NewLine;<ul>&NewLine;<li>Count 1&comma; conspiracy&comma; in violation of 18 U&period;S&period;C&period; § 1349&colon; twenty years’ imprisonment&comma; a fine of &dollar;250&comma;000 or twice the amount of gain or loss&comma; whichever is greater&comma; three years supervised release&period;<&sol;li>&NewLine;<li>Counts 2 through 12&comma; mail fraud&comma; in violation of 18 U&period;S&period;C&period; § 1341&colon; twenty years’ imprisonment&comma; a fine of &dollar;250&comma;000 or twice the amount of gain or loss&comma; whichever is greater&comma; three years supervised release&period;<&sol;li>&NewLine;<li>Counts 13 through 20&comma; wire fraud&comma; in violation of 18 U&period;S&period;C&period; § 1343&colon; twenty years’ imprisonment&comma; a fine of &dollar;250&comma;000 or twice the amount of gain or loss&comma; whichever is greater&comma; three years supervised release&period;<&sol;li>&NewLine;<li>Counts 21 through 31&comma; securities fraud and aiding and abetting&comma; in violation of 15 U&period;S&period;C&period; §§ 78j&lpar;b&rpar; and 78ff&semi; 17 C&period;F&period;R&period; §§ 240&period;10b-5 and 240&period;10b5-2&semi; and 18 U&period;S&period;C&period; § 2&colon; twenty years’ imprisonment&comma; a fine of &dollar;5&comma;000&comma;000 or twice the amount of gain or loss&comma; whichever is greater&comma; three years supervised release&period;<&sol;li>&NewLine;<&sol;ul>&NewLine;<&sol;blockquote>&NewLine;<p>The court may also order that the defendant pay restitution&comma; if appropriate&period;  However&comma; any sentence following conviction would be imposed by the court after consideration of the U&period;S&period; Sentencing Guidelines and the federal statute governing the imposition of a sentence&comma; 18 U&period;S&period;C&period; § 3553&period;<&sol;p>&NewLine;<p>Please note&comma; an indictment contains only allegations against an individual and&comma; as with all defendants&comma; Mr&period; Errico must be presumed innocent unless and until proven guilty&period;<&sol;p>&NewLine;<p>Assistant U&period;S&period; Attorney Kyle F&period; Waldinger is prosecuting the case with the assistance of paralegal Beth Margen and legal assistant Stephanie Mitchell&period;  The prosecution is the result of a sixteen-month joint investigation by the United States Postal Inspection Service&comma; the Federal Bureau of Investigation&comma; and the Monterey County District Attorney’s Office&period;  The U&period;S&period; Attorney’s Office recognizes the substantial assistance provided by the Monterey County District Attorney’s Office in this case&period;<&sol;p>&NewLine;<p><a href&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;usao-ndca&sol;pr&sol;international-fugitive-extradited-united-states-face-charges-regarding-alleged-cedar">Original PressReleases &&num;8230&semi;<&sol;a><&sol;p>&NewLine;<&sol;div>&NewLine;<&sol;div>&NewLine;<&sol;div>&NewLine;

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