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Jim Raeder--Mark McQuitty Busted

Busted: James T. Raeder II, 42, of Mission Viejo, who worked at Capitalwerks/Preferred Lease
Mark McQuitty, 46, of Trabuco Canyon, who worked at Capitalwerks/Preferred Lease
Richard Norris, 60, of Los Angeles, who worked at Capitalwerks/Preferred Lease
Anthony E. Watson, 61, of San Clemente, who worked at Capitalwerks/Preferred Lease
Douglas Cox, 37, of Rancho Santa Margarita, who worked at Capitalwerks/Preferred Lease Adam Zuckerman, 37, of Laguna Beach, who worked at Brickbanc
Kirk McMahan, 31, of Newport Beach, who worked at Brickbanc
Paul Arnold, 56, of Laguna Hills, who worked at Brickbanc
Geoff Silver, 35, of Calabasas, who worked at Silver Industries
Brian Sime, 29, of Irvine, who worked at Brickbanc
John J. Callaghan, 38, of Warminster, Pennsylvania, who worked at Citicapital
Leo Najera, 28, of Mission Viejo, who worked at ECCI
John Budge, 38, of Sartell, Minnesota, who worked at Bach Business Credit
Leigh Dorand, 42, of Phoenix, who worked at Tech Capital
James Breedlove, 51, of Newport Beach, who worked at Santa Fe Equipment
Mark Castleman, 47, of Chino Hills, who worked at Industrial Information Systems
Les Spitzer, 60, of Grenada Hills, who worked at Pyramid Infinite
George Simon, 38, of Redondo Beach, who worked at Advantage IT Solutions
Jeff Greenough, 48, of Laguna Beach, who worked at Peniche
Troy Worrell, 47, of Newport Beach, who worked at Peniche;
Lourey McComber, 53, of Prescott Valley, Arizona, who worked at Peniche
Harold Gold, 75, of Falmouth, Massachusetts, who worked at Leasing Services
Nohad Mousa, 40, of Anaheim, who worked at Saut Wa Soora, Inc.

#### Press Release ##################################

TWENTY-THREE CHARGED IN LEASING FRAUD SCHEME THAT
CAUSED MORE THAN $20 MILLION IN LOSSES TO LENDERS

SANTA ANA, Calif. - Federal prosecutors today (Wednesday) charged nearly two dozen defendants for their roles in a fraud scheme that allegedly caused more than $20 million in losses to several lending institutions that believed they were financing equipment leases.

The charges are a result of an FBI investigation dubbed Operation Lease Fleece, which targeted individuals in the equipment-leasing industry, including loan brokers, equipment vendors and an employee of CitiCapital.

Some of the defendants - through companies called Capitalwerks in Santa Ana, Brickbanc Capital in Costa Mesa and others - marketed cash loans to small businesses experiencing credit problems. Once small businesses agreed to apply for loans, some of the defendants instead submitted equipment-lease applications to lenders. The equipment-lease applications, which were inflated so that the defendants could obtain lucrative “commissions” for themselves, were submitted along with false invoices that purported to document the sale of computer equipment to the small businesses.  

The defendants submitted the fraudulent equipment-lease applications because the qualifying criteria were less stringent than for a cash loan. After the lending institutions approved financing for the equipment leases, the proceeds were not used to purchase equipment aspromised to the lenders. Instead, the money was used to make improper cash loans to the small businesses and to pay lucrativecommissions to employees at Capitalwerks, Brickbanc and the other companies.

Hundreds of bogus equipment-lease packages with fake invoices were presented to financial institutions.The FBI was assisted in their investigation by Citicapital, the leasing division of Citibank, which suffered an estimated $9.5 million in losses and discovered that one of their employees had perpetuated the fraud. Other victim-institutions include Wells Fargo Bank, GE Capital, American Enterprise Leasing, Key Bank, Bank of America and U.S. Bank. Investigators estimate that the victims suffered at least $20 million in losses. The charges filed today include mail fraud, wire fraud and obstruction of justice.

The 23 defendants charged today will be summoned to make court appearances over the next several months. The charges filed today are part of an ongoing investigation by the Federal Bureau of Investigation.

CONTACT: Assistant United States Attorney
Jennifer Waier
(714) 338-3550

### Press Release #############################

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