After a conviction last November following a seven-week trial David Moro was sentenced on October 5, 2011 to 10 and a half years (126 months) in prison for orchestrating and carrying out a $4.2 million broadcasting equipment lease and financing scheme which yielded a loss of more than $3 million to lenders.
Moro was convicted of one count of conspiracy to commit mail and wire fraud; six counts of mail fraud; five counts of wire fraud; three counts of bank fraud; 17 counts of money laundering; and one count of making false statements in a matter within the jurisdiction of the FBI and IRS. Those were 33 counts of his 34 count Indictment. He was not convicted on a second count of making false statements.
Moro is the former Chief Excecutive Officer of Inchon, a New Jersey based business that ran the Russian Radio Network. The network was a broadcasting company that marketed to Russian speakers. Between 2003 and 2005 contacted lenders, directly and through brokers, and informed them that he needed to purchase high-end broadcasting equipment as part of lease-financing agreements which totaled more than $4.2 million.
Moro advised lenders that Inchon needed the broadcasting equipment in order to upgrade and expand its ethnic radio programming. As proof of his need for financing, Moro presented the lenders and brokers with fraudulent equipment invoices reflecting that Smart Function LLC, based in Parsippany, N.J., as well as other purported vendors, had provided Inchon with new high-end Digital Audio Servers, when in fact, Smart Function was acting as a front for Inchon, and was sending the vast majority of the money back to Inchon and Moro after receiving it from the lenders.
Although Moro convinced the lenders the servers contained state-of-the-art software valued at more than $10,000 for each server, in reality the servers contained nothing other than software available for download free-of-charge from the Internet.
Letters and fraudulent equipment invoices were sent to investors informing them that the Digital Audio Servers had been provided. Obviously no such servers even existed. One lender arranged for an inspection of the new servers before funding the lease and Moro had a co-conspirator put new serial numbers on the old servers so that the inspector would think they were brand new.
Moro also submitted phony financial documents to the lenders to convince them that Inchon was a highly profitable company, when in reality it was relying largely on the proceeds of the fraud to continue its operations. Moro had false tax returns prepared for Inchon and for an individual he portrayed as the 100 percent owner of Inchon. In reality, these tax returns were never filed with the IRS, and reflected income and profits for the business and the purported owner that neither ever received.
In Ponzi-scheme fashion, Moro used funds received from the financial institutions through the fraud to make payments on earlier leases. After all of the lease financing agreements were executed and funded by the lenders, Inchon was due to pay more than $100,000 per month. Moro ceased making the required lease payments on behalf of Inchon, resulting in a loss to the lenders in excess of $3 million.
The lenders affected by this scheme are located across the company and include: CFC Investment, Hewlett Packard Financial Services, Santa Barbara Bank and Trust, Wells Fargo Equipment Finance, Citi Capital, the CIT Group, American Express Business Finance Corporation, ACC Capital Corporation, Diamond Lease, Cathay Bank and Bank of the West.
The money laundering charges stem from the movement of funds from Smart Function and other entities to Inchon. Moro used the laundered funds to pay unrelated business expenses and personal expenses, including travel and gifts to family members.
In addition to the prison term, Judge Walls sentenced Moro to five years of supervised release and ordered him to pay restitution in the amount of $3,589,350.20 – Source.
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