February 06, 2008

FORMER EMERYVILLE FINANCIAL ADVISOR SENTENCED TO 30 MONTHS FOR INVESTMENT FRAUD SCHEME

Ordered to pay $2,850,861.55 in Restitution

OAKLAND – United States Attorney Joseph P. Russoniello and Special Agent in Charge, IRS Criminal Investigation, Scott O’Briant announced that Frank J. Garza, Jr., was sentenced Wednesday to 30 months in prison followed by three years of supervised release and ordered to pay restitution of $2,850,861.55 for wire fraud and money laundering charges stemming from an investment fraud scheme. This sentence is the result of an investigation by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.

Mr. Garza, 45, formerly of Emeryville, CA pleaded guilty on August 22, 2007 to two counts of wire fraud and one count of money laundering. According to the plea agreement, Mr. Garza owned and operated Garza & Associates, a tax and bookkeeping service located in Emeryville, California. He also provided consulting and worked as a loan broker for high-end loans. From July 1999 through November 2001, he schemed to solicit money to invest in a Denver, Colorado fiber optics company named Aerie Networks. Mr. Garza used the money received from the investors for his own personal investments, which included a housing development in Cave Creek, AZ and a penthouse in Scottsdale, AZ. He further tried to conceal the misuse of investor funds by using bank accounts in the names of other entities while falsely assuring investors that their investments were made in Aerie stock and that they would receive stock certificates in their names.

In an attempt to conceal assets, Mr. Garza created the following corporate and partnership entities:

Garza & Associates, Emeryville, CA
Alliance Management Services, Emeryville, CA
Vinesong, Ltd., Emeryville, CA
Continuum Enterprises, Ltd., Emeryville, CA
Estate Planning & Preservation Strategies, Inc., Emeryville, CA
Argar Limited Partnership, Emeryville, CA
RGMJ, L.L.C., Sun Lakes, AZ
Hudson Partners, L.L.C., Emeryville, CA

Mr. Garza, was indicted by a federal Grand Jury on April 27, 2005. He was charged with six counts of wire fraud in violation of 18 U.S.C. § 1343, and eight counts of money laundering in violation of 18 U.S.C. § 1956(a)(1)(B)(I). The sentence was handed down by U.S. District Court Judge Claudia Wilken following a guilty plea on two counts of wire fraud and one count of money laundering. Mr. Garza is scheduled to begin his sentence on April 30, 2008.

David L. Denier is the Assistant U.S. Attorney who prosecuted the case with the assistance of Kathy Tat. The prosecution is the result of a lengthy investigation by the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.

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For more information on federal criminal defense law, contact the Law Offices of Joseph Shemaria of Los Angeles, California.