Cali. Man Pleads Guilty To Swindling $50M In CD Investment Plot

An Irvine, California man admitted in a New Jersey federal court to criminal charges of defrauding dozens of victims across the U.S. of $50 million by convincing them to invest in via fake websites that promoted a list of fraudulent CD and other investment opportunities.

CD fraudPhoto Credit: Shutterstock

Allen Giltman remotely pled guilty to the charges: a single count each of conspiracy to commit wire fraud and conspiracy to commit securities fraud, according to the U.S. Attorney’s Office for the District of New Jersey.

Prosecutors say the scheme occurred between 2012 and 2020 and largely revolved around fake purchases of certificates of deposit, or CDs, and tricked more than 70 victims into funneling almost $50 million into what they thought were real investments — with the promise of higher-than-average rates of return.

Giltman used the victims’ funds for a litany of personal expenses, such as “luxury vehicles and high-end retail purchases,” placing the rest in domestic and international bank accounts in Russia, the Republic of Georgia, Turkey and Hong Kong.

“The funds transmitted by the victims were not used to procure a single CD or any other advertised investment products, and none of the victims actually took ownership of the products that they intended to purchase,” the information stated.

As part of the scheme, Giltman and his co-conspirators created and advertised at least 150 fraudulent websites and claimed the institutions were members of or regulated by the Federal Deposit Insurance Corp., or FDIC; the Financial Industry Regulatory Authority, or FINRA; the Securities Investor Protection Corp.; or the New York Stock Exchange. Visitors were also told that their investments would be FDIC-insured, the complaint said.

To conceal their real identities, Giltman and his co-conspirators utilized a number of measures, such as using prepaid phones, bogus email addresses and even “virtual private networks … to anonymize his digital footprint.”

The complaint claimed while on calls with victims, “Giltman falsely identified himself as an ‘account executive’ and used the name of a real representative of a legitimate bank or financial firm.” He further deceived them by including a real executive’s name and number from FINRA’s central registration depository in emails to victims that contained phony CD applications.

After turning in their applications, GIltman provided victims wire instructions via email. After wiring the money, they received another email from Giltman acknowledging their purchase and attaching a fake account statement reflecting the purported balance in the investor’s fictitious account at the spoofed bank or firm,” the complaint said.

“Throughout the scheme, Giltman knew that information conveyed to investors on the spoofed websites and in his phone calls and email exchanges with investors was false and misleading, and he knew that the information was material to investors’ decision to invest in the fake CDs,” according to the complaint.

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