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sep 4, 2013

UNITED STATES DISTRICT COURTSOUTHERN DISTRIG OF FLORIDA tYX7*qITItQI.

s .D. 0F #t.A. . MGMt13-80173-CR-MA R M ATTHEW M A N

CASE NO.

18 U.S.C. j134118 U.S.C. j134318 U.S.C. 9195718 U.S.C. j2314

UM TED STATES OF AM ERICA,

VK

JOSEPH PAUL ZADA,

Defendant.

/

INDICTG NT

The Czrand Jul charges that:

COUNTS 1-21

M AIL FRAUD

1. From at least as early as in or about January 1998, through in or about August 2009, at

Palm Beach County, in the Southem District of Florida, and elsewhere, the defendnnt,

JOSEPH PAUL ZADA,

did knowingly and with intent to defraud, devise and intend to devise a scheme and artifke to

degaud and forobtaining money and property by means of materially false and fraudulent pretenses,

representations and prom ises, knowing that the pretenses, representations and promises were false

when made.

PURPO SE AND OBJECT OF TH E SCHEG TO DEFRAUD

2. It was the purpose and object of the scheme and artifice to defraud for the defendant to

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unlawfully enrich himself by misappropriatingmoney from investors forhispersonal use andbenefk

by making m aterially false representations, and om itting to state material facts, concerning nmong

other things, the use of investors' funds and the profitability of the investments made through the

defendant.

SCH EM E AND ARTIFICE TO DEFR AUD

The manner and means by which the defendant sought to accomplish the objects of the

fraudulent scheme and artifce included, am ong others, the following:

3. In order to attract investors to his fraudulent scheme, the defendant projected an image

of great wealth, portraying himself as a successful businessman and investor with colmections to

Saudi Arabian oil ventures. In this regard, the defendant hosted extravagant parties, drove expensive

luxury vehicles, and m aintained expensive homes in W ellington, Florida and Grosse Pointe,

M ichigan. Unbeknownst to the investors, the defendant used investors' money primarilyto fund this

lavish lifestyle.

4. The defendant often solicited investm ent m oney from trusting associates who lived or

worked near the defendant or were associated with other investors already invested. The defendant

represented to investors that the offered investments would result in large profits within a short

period of time. The defendant provided little specifics regarding these investments, other than

representing that investor funds were being invested in oil ventures. lnstead, the defendant told

investors that there was a tûwindow of opportunity'' and the investors would have to decide whether

to invest money quickly. W hile soliciting m oney, the defendant told investors elaborate cover stories

to justify the lack of verifiable infonuation regarding the proposed investments. For example, the

defendant stated that he was being groomed to replace his m entor who was purportedly a member

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of a secret board of diredors that controlled billions of dollars in investments, or that the defendant

was a board member of a company that bought and sold oil. In essence, the defendant represented

to investors that only he could directly invest in the oil ventlzres tluough his board positions and

connections. The defendant also told investors that their m oney would be pooled with his money to

receive better rates and a larger share of the profits.

5. As result of the defendant's false representations and om issions of facts, investors wire

transferred monies and/or sent checks to the defendant with the understanding that he would use the

funds to invest in various oil ventures on their behalf.Thereafter, investors usually received

promissory notes reflecting the principal nm ount of their investment. The defendant told investors

that he would consider their investments as loans, and provided promissory notes regarding their

initial investments. The defendant never provided to investors any other docum ents, such as account

statem ents.

6. Investor monies were deposited into bank accounts maintained by the defendant.

Thereafter, instead of being used to invest in oil ventures, the investor monies were withdrawn from

those accounts and used to support the defendant's lavish lifestyle and to m ake purported returns on

investm ents to prior investors.

7. Occasionally, investor S.F. also loaned the defendant money because the defendant

claim ed he had cmsh flow problems. However, S.F. would not have lent the defendant m oney had

the defendant disclosed to him that the defendant had not previously invested S.F.'S money in oi1

related ventures.

8. From in or around Janualy 1998, through in or around April 2009, the defendant caused

over twenty investors to invest over $20 million based on materially false statements and omissions

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of material facts. The investors were J.D.G, R.A.D., R .J.D., R.R., G.E.D., R.J.H., S.L.H., S.F.,

R.J.N., J.M .G., J.C., J.'W ., B.L.S., G.C.R., T.P., J.P., J.E.C., S.P.C., (M .C.E., R.A.'W ., J.D.S., M .J.S.,

D.S.S., J.J.A., B.J.A., P.A., C.A., and G.A.

9. Once invested, the defendant sought to convince investors to continue to reinvest their

money ratherthan take out alleged profits or gains. In this way, the defendant was able to continually

solicit additional money from investors without having to pay out investment gains and/or

investm ent principal.

10. ln furtherance of the scheme to defraud, the defendant occasionally disbursed money

to investors as a supposed retunz of purported principal and profits. ln reality, the returns paid by the

defendant to the investors cam e from new investm ent rem ittances, and not profits.

1 1 . W hen the ftmds in the defendant's bank accounts were not suftkient to meet requests

from investors who sought return of principal and profits, the defendant lulled investors into a false

sense of security by entering into settlem ent agreements with investors. The defendant also sent

setllement checks to investors despite not having enough money in the defendant's bank accounts

to cover the settlem ent checks.

USE O F THE M AILS

12. On or about the dates specified as to each count below, the defendant, for the purpose

of executing and in furtherance of the aforesaid scheme and artifice to defraud and for obtaining

m oney and property by means of m aterially false and fraudulent pretenses, representations and

promises, did know ingly cause to be delivered by the United States Postal Service or by private or

com mercial interstate canier, according to the directions thereon, such matters and things, as more

particularly described in each count below :

4

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COUNT DATE DESCRIPTION OF M AILING

l August 18, 2009 A cover letter and check in the amount of $5,000mailed by the defendant to G.D.

July 6, 2009 A cover letter and three checks totaling $3,500mailed by the defendant to J.M .G.

3 June 17, 2009 A cover letter and check in the amount of $5,000m ailed by the defendant to G.D .

4 April 30, 2009 A cover letter, two Standstill Agreements and

two settlement checks totaling $8,000,000 mailedby the defendant to R.R. and R.J.D.

April 24, 2009 A cover letter and a settlem ent check in the

amount of $550,000 mailed by the defendant toR.J.N.

6 April 20, 2009 A settlement check in the amount of $5,000,000mailed by the defendant to R.H .

7 April 7, 2009 A check in the amount of $100,000 mailed by thedefendant to R.A .D.

8 April 6, 2009 A cover memo and a check in the amount of

$30,000 mailed by the defendant to J.D.G.

9 M arch 7, 2009 A Standstill Agreement m ailed by the defendant

to R.A .D .

10 M arch 10, 2009 A Standstill Agreement m ailed to S.F.

1 1 February 18, 2009 A cover letter and Standstill Agreement mailed

by the defendant to J.D.G.

12 February 18, 2009 A cover letter and Standstill Agreem ent mailed

by the defendant to J.W .

13 November 25, 2008 A cover memo and a $5,000 check mailed by thedefendant to R.J.N .

14 October 17, 2008 A check in the amount of $100,000 mailed by thedefendant to R.A.D.

15 October 6, 2008 A Release and Prom ise to Cooperate docum ent

mailed to J.R.W .

5

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COUNT DATE DESCRIPTION OF M AILING

16 M ay 23, 2008 A cover letter and a Release Form mailed by the

defendant to J.C.

17 April 9, 2008 A Satisfaction of Debt and Release and a

settlement check in the amount of $6,000,000mailed by the defendant to J.C.

18 M arch 12, 2008 Two Satisfaction of Debt and Release forms and

two settlement checks totaling $6,000,000 mailedby the defendant to R.R. and R.J.D.

19 Febrtzary 27, 2008 A cover letter and a M oditk ation to Satisfaction

of Debt and Release and a settlement check in the

amotmt of $850,000 mailed by the defendant toJ.W .

20 Febnlary 27, 2008 A cover letter and a M odification of the

Satisfaction of Debt and Release and a settlem ent

check in the amount of $750,000 mailed by thedefendant to J.D.G.

21 January 9, 2008 A cover letter and a check in the am ount of

$128,286 mailed by the defendant to J.M .G.

All in violation of Title 18, United States Code, Section 1341.

COUNTS 22-23

W IRE FR AUD

1. From at least as early as in or about January 1998, through in or about August 2009, at

Palm Beach County, in the Southern District of Florida, and elsewhere, the defendant,

JO SEPH PAUL ZADA,

did knowingly and with intent to defraud devise and intend to devise a scheme and artifice to defraud

and for obtaining m oney and property by means of m aterially false and fraudulent pretenses,

representations and promises, knowing that the pretenses, representations and promises were félse

6

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when nnade.

PURPOSE AND OBJECT OF THE SCHEM E TO DEFM UD

2. It was the purpose and objed of the scheme and artifice to defraud for the defendant to

unlawfully emichhimself bymisappropriatingmoney from investors forhispersonal use andbenefh

by m aking m aterially false representations, and omitting to state m aterial facts, concem ing am ong

other things, the use of investors' ftmds and the profitability of the investments made through the

defendant.

SCH EM E AND ARTIFICE TO DEFRAUD

3. Paragraphs 3 through 1 1 of the M anner and M eans section of Counts 1-2 1 of this

lndictment are re-alleged and incorporated by reference as though fully set forth herein as a

description of the scheme and artifice to defraud.

W IRE COM M UNICATION

4. On or about the dates speciûed as to each count below, the defendant, for the purpose of

executing and in furtherance of the aforesaid scheme and artitice to defraud and for obtaining money

and property by means of materially false and fraudulent pretenses, representations and promises,

did knowingly transm it and cause to be transm itted, by m eans of wire comm unications in interstate

and foreign commerce, certain writings, signs, signals, pictures and sounds, as m ore particularly

described in each count below :

COUNT DATE W IRE CO M M UNICATIO N

22 Septem ber 2, 2008 An email from J.C. to J.W . containing bank

routing information

23 December 24, 2007 A $100,000 wire transfer from the bankaccount of R.H . at Sterling Bank to the bank

account of the defendant at Peoples Barlk

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A1l in violation of Title 18, United States Code, Section 1343.

CO UNTS 24-25

M ONEY LAUNDERING

1. On or about the dates specified below, in Palm Beach County, in the Southern District of

Florida, and elsewhere, the defendant,

JO SEPH PAUL ZADA,

did knowingly engage in a monetary transaction, as specified as to each count below, affecting

interstate and foreign comm erce, by and through a financial institution, in crim inally derived

property of a value greater than $10,000, such property having been derived from a specified

unlawful activity, that is, mail and wire fraud, in violation of Title 18, United States Code, Sections

1341 and 1343:

COUNT DATE M ONETARY TRANSACTION

24 January 3, 2008 A check (#1060) in the amount of $12,500payable to Fishbones drawn on a bank

account of the defendant

25 December 6, 2007 A check (#3885) in the amount of $13,500payable to Sterling Bank drawn on a bank

account of the defendant

A11 in violation of Title 18, United States Code, Section 1 957.

COUNTS 26-27

INTERSTATE TRANSPORTATION OF STO LEN PRO PERTY

1 . On or about the dates specified below, in Palm Beach County, in the Southez.n District of

Florida, and elsewhere, the defendant,

JO SEPH PAUL ZADA,

8

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did transport, transmit and transfer, and cause to be transported, transmitted and transferred in

interstate commerce, money of a value of $5,000 or more, as specitied below, that had been taken

by fraud, knowing the money had been taken by fraud:

COUNT DATE M O NEY TRANSFERRED BY FRAUD

26 March 14, 2008 A check (#4229) in the amount of $15,000to the Clerk and Comptroller of Palm

Beach County drawn on a bank account of

the defendant

27 January 14, 2008 A check (#3952) in the amount of $9,000to Braman M otorcars Palm Beach drawn

on a bank account of the defendant

A11 in violation of Title 18, United States Code, Section 23 14.

FO RFEITURE

The allegations contained in Counts 1-27 of this Indictment are hereby realleged and

incorporated by reference for the purpose of alleging forfeitures pursuant to Title 18, United States

Code, Sections 981(a)(1)(A) and (C) and Title 28, United States Code, Section 2461(c).

Upon conviction of the offenses in violation of Title 18, United States Code, Sections

1341, 1343, 1957, and 2314 set forth in Counts 1-27 of this Indictm ent, the defendant, JO SEPH

PAUL ZADA, shall forfeit to the United States of America, pursuant to Title 18, United States

Code, Sections 981(a)(1)(A) and (C) and Title 28, United States Code, Section 2461(c), any

property, real or personal, which constitutes or is derived from proceeds traceable to the offenses.

lf any of the property described above, as a result of any act or om ission

of the defendant:

a. cannot be located upon the exercise of due diligence;

9

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b. has been transferred or sold to, or deposited with, a third party;

has been placed beyond the jurisdiction of the court;

has been substantially diminished in value; or

has been com mingled with other property which cannot be divided without

diftkulty,

d.

the United States of America shall be entitled to forfeiture of substitute property plzrsuant to Title

2 1, United States Code, Section 853(p), as incorporated by Title 28, United States Code, Section

246l(c).

All pursuant to Title 1 8 United States Code, Sections 98 1(a)(1) (A) and (C) and Title 28

United States Code, Section 246 1(c).

A TRUE BILL

.x.-- /

FOREPERSON

Z#

W zW IFREDO A. FERRER

UNITED STATES ATTORNEY

ROLANDO GARCIA

ASSISTANT UN ITED STATES ATTORN EY

10

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

UNITED STATES OF AMERICA

VS.

JOSEPH PAUL M DADefendants.

I

CASE NO.

CERTIFICATE OF TRIAL ATTO RNEY.

Superseding Case Information:

Court Division: (select One)

Miami Ke W estx w )B FTPFTL

I do hereby certify that:

New Defendantts) Yes No XNumber of New DefendantsTotal number of counts

l have carefully considered the allegations gf the indictmqnt, the number qf defendants, the number ofrobable witnesses and the legal complexlties of the Indlctment/lnformatlon attached hereto.P

2 . I am Mware that the information supplied 9n thij jtatement will be relied upon by the Ju id es of thisCpurt ln Setting their galendars and schedullng crlmlnal trlals underthe mandate of tne Speedy Trial Act,Tltle 28 U.S.C. Sectlon 3161.

Iqterpreter: (Yes 9r NjLIst Ianguage and/or dlalecThis case will take q

Nn

days for the padies to try.

5. Please check appropriate category and type of offense Iisted below:

(Check only one) (Check only one)

0 to 5 days6 to 10 days1 1 to 20 days21 to 60 days61 days and over

6. Has this case been previously filed in this District Coud? (Yes or No) MnIf yes:

Judge: Case No.(Attach copy gf dispositive MrdejHas a complalnt been filed In thls matter? (Yes or No) YpqIf yeq:Maglstrate Case No.

Related Misc:llaneous numbers:Defendantts) ln federal custody as ofDefendantts) In state custody as ofRule 20 from the District of

Is this a potential death penalty case? (Yes or No)

P?ttyMjnorMlsdem.Felony

Does this case or gi inate from a matter pending in the Nodhern Region of the U.S. Attorney's Office priorG03? Yes X Noto October 14, 2

Does this case originate from a matter pending in the Central Region of the U.S. Attorney's Office priorD07? Yes Y Noto September 1, 2

8.

&

ROLANDO GARCIAAS@ISTANT UNITED STATES ATTORNEYFlorlda Bar No./court No. 763012

*penalty Sheetts) attached REV 4/8/08

Case 9:13-cr-80173-KAM Document 1 Entered on FLSD Docket 09/04/2013 Page 11 of 12

UNITED STATES DISTRICT CO URT

SOUTHERN DISTRICT OF FLORIDA

PENALTY SHEET

Defendant's Nam e: JO SEPH PAUL ZADA

Case No:

18 U .S.C. 1341

* M ax-penalty: twenty years' imprisonment. $250.000 fine. five years' supervised release and restitution

Count: 22-23

W ire Fraud

18 U .S.C. 1343

* M ax.penaltv: twentv vears' imprisonmenk $250.000 tine. five years' supervised release and restitution

Count: 24-25

M oney Laundering

18 U.S.C. 1957

* M ax.penalty: ten years' imprisonment. $250.000 fine. three years' supervised release and restitution

Count: 26-27

Interstate Transportation of Stolen Property

18 U.S.C. 2314

* M ax-penalty: ten years' imprisonment. $250.000 fine. three years' supervised release and restitution

*Refers only to possible term of incarceration, does not include possible fines, restitution, special

assessm ents, parole terms, or forfeitures that m ay be applicable.

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