Three Charged With Defrauding Citibank
Las Vegas, Nev. – A federal grand jury has returned an indictment against three individuals charging them with scheming to defraud Citibank of millions of dollars, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
ANDREW MICHAEL, age 38, BERNADETTE PAGAN, age 36, and PHYLLIS RIES, age 75, all of Las Vegas, are charged with one count of Bank Fraud, one count of False Statement on Credit Application, and Criminal Forfeiture. If convicted, the defendants face up to 30 years in prison and a $1,000,000 fine on each of the charges.
The Indictment alleges that from approximately December 29, 2005, to July 24, 2006, ANDREW MICHAEL, his wife, BERNADETTE PAGAN, and his mother, PHYLLIS RIES, through false pretenses, including the use of false financial information, false bank references, and the submission of false independent audit reports, obtained a commercial line of credit and three Diners Club Corporate Cards for California Holding Company, Inc. (CHC) in the amount of approximately $8.5 million. They later attempted to have the line of credit increased to $20 million.
A Criminal Complaint filed in the case on July 24, 2006, states that in support of the application for the commercial line of credit, MICHAEL represented that CHC maintained several bank accounts in Beverly Hills, California, and that an independent audit verified that the corporation was a viable real estate investment trust with assets totaling approximately $1 billion. The Complaint also states that MICHAEL provided a website link for CHC, which listed assets owned by CHC and listed MICHAEL as Vice President of Mergers and Acquisitions.
Investigators determined that the website information had been pirated and "mirrored" from a website owned by a legitimate publicly traded billion dollar company. On June 28, 2006, a Citibank investigator became aware of the suspected fraud and notified the United States Secret Service. Account histories for the corporate credit cards revealed that over $2 million had been charged to the accounts.
The Indictment seeks forfeiture of up to $8.5 million in properties derived from the proceeds of the offenses, including $24,000 in cash, 170 troy ounce silver bars, 10 tubes of gold flakes, 288 collectible coins, a Rolex watch, cashier's checks, and funds in several investment accounts.
ANDREW MICHAEL is currently in custody and BERNADETTE PAGEN was released on a personal recognizance bond. A warrant has been issued for the arrest of PHYLLIS RIES. Arraignments for MICHAEL and PAGEN are scheduled for August 18, 2006, at 8:30 a.m before U.S. Magistrate Judge Robert J. Johnston.
The case is being investigated by the United States Secret Service and the Las Vegas Metropolitan Police Department. The case is being prosecuted by Assistant United States Attorneys Kimberly M. Frayn and Daniel D. Hollingsworth.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendants are presumed innocent and are entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
