In court documents just released, former Ameridebt founder and leader, Andris Pukke has pled guilty to obstruction of justice in his effort to hide millions of dollars of money from his debt relief enterprise.
As part of the plea agreement, Pukke, pleads guilty to obstruction of justice and now faces up to ten years in prison, a fin and three years of supervised release.
Pukke has been on the run since 2003 when the Federal Trade Commission sued him. And by the recent action by government prosecutors, they are not done with him yet.
These most recent troubles have entangled others along the way I’ve written about before, such as Tim McCallan and Stephen Todd Cook. As you read the Statement of Facts below, Cook was the person involved in the 69 Emerald Bay transaction who is referred to as “Individual 1.”
The interrelationships of Pukke and his friends is still an incredible screenplay in the writing. It should be made into a movie since it involves swimsuit models, foreign financial obfuscation, offshore gambling, back room planning and screwing a lot of consumers out of millions of dollars. Oh yes, we can’t forget the hidden shrimp farm and wildlife preserve.
Pukke’s Signed Admission States
The United States and Defendant Andris Pukke stipulate and agree that if this case proceeded to trial, the United States would prove the facts set forth below beyond a reasonable doubt. They further stipulate and agree that these are not all of the facts that the United States would prove is this case proceeded to trial.
A. The FTC Case and Appointment of Receiver
Prior to 2003, defendant ANDRIS PUKKE operated business which offered credit counseling services, including AmeriDebt, Inc. (“AmeriDebt”) and DebtWorks Inc. (“Debt Works”), Maryland corporations with their principal place of business in Germantown, Maryland. On or about November 19, 2003, the Federal Trade Commission (“FTC”) filed a civil action in the United States District Court for the District of Maryland to enjoin defendant PUKKE, AmeriDebt and DebtWorks for making deceptive claims about the nature and costs of services provided by AmeriDebt. The case was docketed as FTC v. AmeriDebt, Inc., et al., Civil Action No. PJM-03-3317 (“the FTC case”).
During its case, the FTC alleged that defendant PUKKE had transferred or caused the transfer of substantial assets to his father, estranged wife, girlfriend, and other entities and trusts he controlled, and had used corporate funds to pay for lavish personal expenses and investments. On or about April 20, 2005, the district court enjoined defendant PUKKE and DebtWorks from transferring or liquidating certain assets; ordered an account and repatriation of assets; and appointed Robb Evans and Associates, LLC as Receiver, with broad powers to marshal, converse, protect, and operate “Receivership Property”. Receivership Property included all assets, wherever located, that were “owned, controlled, or held by for the benefit of,” “in the actual or constructive possession of,” or “held by an agent of” defendant PUKKE and DebtWorks or “any corporation, partnerships, trust, or other entity directly or indirectly owned or controlled by” them. Defendant PUKKE and AmeriDebt were ordered to “fully cooperate with and assist the Receiver in taking and maintaining possession, custody, or control of Receivership Property.” Defendant PUKKE was also required to submit an accounting by completing a Department of the Treasury, Internal Revenue Service Form 433-A (Collection Information Statement for Wage Earners and Self-Employed Individuals), which he submitted statements in response to various periodic reports filed by the Receiver. On or about May 17, 2006, the district court approved a settlement of the FTC case which limited the business activities of defendant PUKKE and DebtWorks, ordered monetary relief, granted the FTC a claim against the Pukke bankruptcy estate, and made the Receiver’s appointment permanent. The settlement was expressly premised upon the truthfulness and completeness of financial information submitted by defendant PUKKE.
B. Defendant PUKKE’s Chapter 11 Bankruptcy FIling and Case
On July 11, 2005, defendant PUKKE filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code (Title 11 of the United States Code) and in the United States Bankruptcy Court for the Central District of California (“the PUKKE bankruptcy”). Two days later, defendant PUKKE filed a motion in the FTC case seeking an order requiring the Receiver to turn over control of his assets to his bankruptcy estate. On July 27, 2005, defendant PUKKE filed bankruptcy schedules and a Statement of Financial Affairs. On August, 26, 2005, the PUKKE bankruptcy was transferred to the District of Maryland. Defendant PUKKE did not challenge the ruling or dismiss the action and elected to continue with the bankruptcy case in the District of Maryland. When the case filed arrived in the District of Maryland, it was docketed as In re Andris Pukke, No. 05-CV-02362-PJM (“the PUKKE bankruptcy”). The district court retained jurisdiction over the PUKKE bankruptcy. One September 21, 2005, defendant PUKKE‘s bankruptcy schedules and a Statement of Financial Affairs were docketed in the District of Maryland. On September 26, 2005, the district court entered an order in the FTC and the PUKKE bankruptcy staying the bankruptcy case, denying PUKKE‘s request to transfer assets from the Receiver to his bankruptcy estate, and reaffirming the Receiver’s authority under the preliminary junction.
The FTC case and the PUKKE bankruptcy were both official proceedings pending before a judge of the United States District Court for the District of Maryland.
C. Obstruction of the FTC Case and the PUKKE Bankruptcy
Between in or about July 2005 and in or about 2007, defendant PUKKE corruptly influenced, obstructed and impeded, and endeavored to influence, obstruct, and impede, the due administration of justice, namely, the FTC case and the PUKKE bankruptcy, by concealing or making false statements concerning multiple assets relevant to the disposition of Receivership Property and the bankruptcy estate. To the extent the defendant disputed whether particular items constituted Receivership Property and/or property of the bankruptcy case could seek a judicial determination of its status.
- Entities Involved in Internet Gambling
Internet Opportunity Entertainment, Inc. (“Internet Opportunity”) was an Antiguan entity that operated websites related to Internet sports gambling, including Sportsbook.com and playersonly.com. In or about July 1997, defendant PUKKE invested in Internet Opportunity. Defendant PUKKE received a letter dated July 26, 1997 which confirmed his acquisition of a 3.5 percent ownership interest in Internet Opportunity for $105,000. In or about August 1999, defendant PUKKE caused four entities to be formed in Nevis, West Indies: The Carolina Trust, The Carolina Foundation Ltd., Carolina Reinsurance Ltd., and SeaSpray Holdings Ltd. (“SeaSpray). On or about August 20, 1999 defendant PUKKE transferred his “entire ownership interest of 3.5% of Internet Opportunity an Antiqua corporation to the Carolina Foundation…..”
On or about July 27, 2001, Sportingbet plc, a publicly traded British company, acquired Internet Opportunity. Defendant PUKKE subsequently transferred shares of Sportingbet plc to nominee owners to be used to his own personal benefit.
In the FTC case and on the Schedule B – Personal Property in the bankruptcy case, defendant PUKKE did not accurately disclosed his interests in Internet Opportunity, Sportingbet, The Carolina Trust, The Carolina Foundation LTD., Carolina Reinsurance Ltd., and SeaSpray Holdings Ltd. or any subsidiaries thereof.
- Accounts at HansaBanka in Latvia and Valkyr Trust in Liechtenstein
Defendant PUKKE likewise did not disclose accurately disclose his interests in accounts at A/S Hansabanka (“HansaBanka”), a financial institution in Latvia. Defendant PUKKE maintained accounts at HansaBanka in the name of his father, Janis Pukke, specifically HansaBanka account **** 5390 (“the HansaBanka 5390 account”) and account **** 8805 (the “Hansabanka 8805 account”). Defendant PUKKE‘s father was a commercial printer who never earned more than $60,000 per year from his employment and did not declare any interest in foreign bank accounts, or any interest payments from such accounts, on his income tax returns.
In 2004, defendant PUKKE had asserted under oath that he maintained the HansaBanka accounts. Specifically, in a loan application dated on or about February 12, 2004, defendant PUKKE states under oath that his bank accounts included the HansaBanka 5390 account, with a value of $1,976,108, and the HansaBanka 8805 account, with a value of $247,468. This assertion was consistent with a January 8, 2004 letter from HansaBanka, which verified that defendant PUKKE and his father maintained the 5390 and 8805 accounts with the bank.
Between in or about August 2003 and in or about November 2004, $2,242,284 in proceeds from the sale of Sportingbet stock had been deposited in the HansaBanka 5390 account. In or about February 2005, $10,556,031.25 in proceeds from the sale of Sportingbet stock was deposited into the HansaBanka 5390 account. By the time of defendant PUKKE‘s bankruptcy filing in July 2005, most of these funds had been transferred out of the accounts. The transfers included payments to defendant PUKKE‘s attorneys, to the school in Florida that several if his children attended, and into investments in Belize, as discussed below.
Just over one month before defendant PUKKE‘s bankruptcy filing, on or about June 16-20, 2005 approximately $8 million was transferred from HansaBanka 5390 account to an account in Janis Pukke’s name at Hypo Investment Bank in Liechtenstein. More than $6.8 million was then transferred into another account at the same bank in the name of an entity called the Valkyr Trust. As part of Janis Pukke’s settlement with the Receiver, Janis Pukke surrendered any claim to these funds. The Receiver recovered approximately $1.9 million from Valkyr Trust account and an additional approximately $1.1 million from Janis Pukke’s account.
- 69 Emerald Bay, Laguna Beach, California
In the FTC case and in bankruptcy Schedule A – Real Property, defendant PUKKE did not list any interest in real property located at 69 Emerald Bay, Laguna Beach, California (“69 Emerald Bay”). On or about May 20, 2005 defendant PUKKE‘s girlfriend signed a contract to purchase a residence located at 69 Emerald Bay for $6,450,000. The contract provided for an initial deposit of $193,500. A week later, on or about May 27, 2005, defendant PUKKE’s girlfriend assigned her rights relating to the property to defendant’s friend (“Individual 1″). Neither the girlfriend nor Individual 1 possessed assets or income sufficient to purchase 69 Emerald Bay, and at all times acted as nominee purchasers for defendant PUKKE. On or about June 4, 2005, defendant PUKKE sent Individual 1 an email with an attachment consisting of a contingency removal form relating to 69 Emerald Bay. Individual 1 then sold 775,000 shares of stock of sportingbetplc which he held as the defendant’s nominee owner. The stock was sold by Walker Crips Stockbrokers Limited in London, United Kingdom. On or about July 6, 2005, Walker Crips sent a wire transfer of $2,081,849.37 to the escrow company involved in the closing on 69 Emerald Bay. On or about July 8, 2005, Individual 1 participated in the closing. The house was purchased with the two payments of $193,500 and $2,081,849.37, as well as two loans of $3,547,500 and $645,000.
Defendant PUKKE and his girlfriend negotiated with an architectural firm to remodel the property. On or about June 13, 2005, defendant PUKKE wrote to the architect and stated, “Just got back in the country and received your proposal. Everything looks fine. I’ll give you a call in the next week or so to schedule a time we can get together and start getting things moving.” On or about June 20, 2005, defendant PUKKE scheduled a meeting with the architect for June 28, 2005. Defendant PUKKE continued to work with the architect on remodeling plans through September 2005. The architect sent invoices for the architectural work to defendant PUKKE‘s residence in Newport Beach, California.
In April 2007, after the Receiver commenced contempt actions against Individual 1 and the defendant PUKKE, Individual 1 surrendered his interest in 69 Emerald Bay to the Receiver. The Receiver realized a net amount of $1,548,878.83 from the sale of the property.
- Dolphin Development and Belize Interests
Defendant PUKKE set forth incomplete and inaccurate information that falsely undervalued defendant PUKKE‘s interests in entities developing property in Belize. For example, in bankruptcy Schedule B, he included the following asset, which he valued at $0.00: “Dolphin Development Company Ltd. (approx. 30% interest held by Puck Key Investments L-8 LLC, which is owned by Puck Key Investments L-1 LLC, which is owned by the P and P II Family Trusts) – Formed to develop land, has not done business.”
Specifically, in 2002 defendant PUKKE had established limited liability companies (“LLCs”) known as Puck Key Investments L-1 through L-9. Some of the LLCs were formed in the Island of Nevis, West Indies; others were formed in Delaware, Florida, Maryland, Nevada and New York. Puck Key Investments L-8 LLC, a Nevis entity, owned a 60 percent – not 30 percent – ownership interest in Dolphin Development Company Limited (“Dolphin Development”), a for-profit company organized and registered under the laws of Belize and formed in April 2003. Defendant PUKKE was a director of Dolphin Development. In or about April 2003, defendant PUKKE and the other three directors of Dolphin Development formed another entity under the laws of Belize, a not-for-profit company known as Sittee River Wildlife Reserve (“SRWR”). In or about April 2003, Dolphin Development and SRWR acquired substantial land holdings near the Sittee River in Belize. For $1,500,000, SRWR purchased two parcels of land comprising more than 11,500 acres known as “All Pines” and “Plenty.” 350 acres known as “Regalia.” Defendant PUKKE funded the $3,000,000 purchase of the parcels of property and deeds were recorded on or about April 25, 2003. Dolphin Development and SRWR then developed a project in Belize known as Sanctuary Bay Estates.
In 2008, the Receiver reached a settlement with SRWR under which the Receiver received a $2 million cash payment and $18,008.01 in sale contract receivable payments.
- Contingent Claims Belonging to SeaSpray, Inc.
Finally, in the FTC case and Schedule B, defendant PUKKE did not disclose any interest in SeaSpray Holdings Ltd. and also did not disclose any property under the category relating to “[o]ther contingent and unliquidated claims of every nature….” In a deposition conducted by the Receiver on or about December 20, 2006, defendant PUKKE falsely denied that he had any ownership interest in SeaSpray. In fact, SeaSpray, which defendant PUKKE had formed in 1999 in Nevis and which he wholly owned, invested approximately $7.1 million between August 2000 and December 2002 in Agave, Ltd. an offshore company founded in 2000 in the Cook Islands. The Securities and Exchange Commission later commenced a civil enforcement action charging Agave and related defendants with fraud, SEC v. Keith L. Mohn, et al., Civil Action 02-74634 (E.D. Mich.). After the United States District Court for the Eastern District of Michigan placed Agave and related defendants into receivership, defendant PUKKE filed a proof of claim against the Agave defendants, submitted a supporting declaration from SeaSpray’s agent in Nevis in February 2005, and submitted the agent’s supplemental declaration in May 2005. Defendant PUKKE maintains that he did not intend to pursue the claim. The Receiver pursued this proof of claim in the SEC proceedings in Michigan and recovered $1,811,845.51 from the Agave estate.
SeaSpray also invested $90,000 to purchase 180,000 share in NextGame, Inc., a California corporation which later changed its name to iWin, Inc. Defendant PUKKE also did not disclose this investment. The Receiver recovered another $189,000 relating to SeaSpray’s related investment in iWin.
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