LOS ANGELES—Two residents of Oxnard and
a South Carolina man each pleaded guilty today to federal fraud charges,
admitting that they participated in a $41 million investment scheme that
victimized hundreds of investors across the United States.
Using Ventura County companies called
Unlimited Cash Inc. (UCI) and Douglas Network Enterprises Inc. (DNE), the
defendants told victims that UCI would sell ATMs and “Ad Toppers”—computer
monitors capable of displaying video advertisements—and DNE would place the
devices in commercial locations that would generate income. Victims were told
they would earn income from ATM transaction fees and advertisement revenue
generated by Ad Toppers, which would show ads for companies such as Coca-Cola,
Gold’s Gym, and Paramount Pictures. Even though they took in approximately $41
million over a four-year period, the defendants did not place most of the ATMs
and Ad Toppers sold to investors. The loss amount to victims is approximately
$27 million.
Each of three defendants pleaded guilty
today to 17 counts in an indictment that was returned in August 2010. The
defendants are:
■Alan G. Flesher, 64, of Oxnard;
■Wayne D. Flesher, 62, of Oxnard
(previously of Ventura); and
■Nancy Carol Khalial, 64, of Oxnard.
The indictment in the case alleges that
the defendants used the majority of investor funds to pay personal expenses and
to continue operating the fraudulent scheme by paying personal salaries and
sales commissions and by making Ponzi-style payments.
As a result of today’s guilty pleas,
each of the three defendants faces a statutory maximum sentence of 340 years in
federal prison. They are scheduled to be sentenced by United States District
Judge Terry J. Hatter Jr. on October 1.
This investigation was conducted by the
FBI and the United States Postal Inspection Service, which received assistance
from the Securities Exchange Commission.
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