Four Charged with Defrauding U.S. and Canadian Investors

Posted on July 12, 2022Comments Off on Four Charged with Defrauding U.S. and Canadian Investors

Four Canadian Nationals Charged with Defrauding U.S. and Canadian Investors in Diamond Scheme

First Assistant U.S. Attorney Michelle M. Baeppler announced that four Canadian men were charged for their roles in an alleged conspiracy that persuaded investors in the United States and Canada to invest in diamonds and other jewelry through false and misleading information.

Named in the charging documents are James Gagliardini, 44, of Unionville, Ontario; Michael Shumak, 52, of Markham, Ontario; Anthony Palazzolo, 64, of Pickering, Ontario and Jack Kronis, 63, of Toronto, Ontario. The defendants are each charged with one count of wire fraud.

According to court documents, the defendants portrayed themselves as employees of Paragon International Wealth Management, Inc., a Canadian investment firm that sold investors diamonds and other jewelry items via unsolicited phone calls to individuals in the United States and Canada.

It is alleged that from 2013 to 2018, Paragon would purchase lists of potential customers in the U.S. and Canada and made unsolicited telemarketing phone calls to these individuals. During these phone calls, it is alleged that Paragon representatives persuaded potential investors to make small investments in “pink diamonds,” which Paragon claimed would increase in value.

If an individual agreed to invest, court documents state that Paragon would often mail the customer a real pink diamond and a legitimate appraisal certificate as a show of good faith.

According to court records, after some time, Paragon would contact the customer again to persuade them to invest more money using false or misleading information and several fictitious schemes it had concocted.

One scheme is alleged to have involved informing investors that a wealthy international buyer would purchase the investor’s diamonds at a significant profit if the investor gave Paragon more money to increase the diamond’s physical size. Another scheme allegedly involved asking investors to give Paragon more money in order to “upgrade” their diamonds and make them more valuable at fabricated diamond auctions. A third scheme allegedly involved sending customers fraudulent appraisal certificates, which inflated the value of an investor’s diamonds they purportedly owned.

A bill of information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

If convicted, a defendant’s sentence will be determined by the Court after a review of factors unique to this case, including the prior criminal records, if any, role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum, and in most cases, it will be less than the maximum.

This case was investigated by the FBI Cleveland. This case is being prosecuted by Assistant U.S. Attorneys James P. Lewis and Brad J. Beeson.

SOURCE: USDOJ.Today

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