Source: United States Department of Justice News
Damian Williams, the United States Attorney for the Southern District of New York, announced that ROGER RALSTON, the CEO of DirectView Holdings, Inc. (“DirectView”), a Florida-based video surveillance and security company, was sentenced to five years in prison for defrauding elderly victims in connection with an international telemarketing scheme that caused losses of nearly $16 million. RALSTON previously pled guilty before U.S. District Judge Jed S. Rakoff, who imposed the sentence. Co-defendants Christopher Wright and Steven Hooper previously pled guilty and were sentenced to 52 months in prison and 42 months in prison, respectively, for their roles in the fraud.
According to the allegations in the Indictment, court filings, and statements made in Court:
Between approximately 2009 and 2015, RALSTON and other co-conspirators engaged in a scheme to defraud victims in the United Kingdom of nearly $16 million through the sale of false, fraudulent, and materially misleading investments, and to launder the proceeds of the fraud through bank accounts in multiple foreign jurisdictions. RALSTON and his co-conspirators used the services of telemarketing call centers to identify and cold-call potential victims, who were primarily elderly or retired individuals residing in the United Kingdom. Over a series of telephone calls, the telemarketers persuaded victims to invest money under various false and misleading pretenses, including the promise of short-term, high-yield, no-risk returns, when in fact the investments were high-risk, illiquid, and in some instances, entirely fictitious. Many victims were persuaded to make additional investments under the false pretense that they would be permitted to sell their holdings if (and only if) they purchased more. In reliance on the false representations and promises, the victims wired funds to various bank accounts in the United States, including in the Southern District of New York, in the names of corporate entities controlled by RALSTON. RALSTON then mailed and emailed documents related to the fraudulent investments, including purchase contracts and investment certificates, to the victims. Victims who tried to sell their investments found that they were unable to do so. The victims never received a refund on their principal or any return on their investments.
In order to conceal the nature, location, source, ownership, and control of the proceeds of the fraudulent scheme, RALSTON regularly transferred a substantial portion of the fraud proceeds from bank accounts in the United States, including in the Southern District of New York, to overseas bank accounts, including accounts in Cyprus, Switzerland, and the United Kingdom, in the names of various shell companies controlled by RALSTON’s co-conspirators.
The nature of the particular fraudulent investment vehicles being marketed to the victims changed over time. From in or about 2009 until in or about 2011, RALSTON and his co-conspirators sold DirectView stock to the victims based on telemarketers’ false representations and promises that the shares were a no-risk, short-term investment in a debt-free company and that the shares were likely to increase over 100% in value in a short period of time. In contrast to what RALSTON represented to victims, DirectView’s annual report filed with the United States Securities and Exchange Commission for the year ending December 31, 2010, contained dire warnings about the poor fiscal health of DirectView and the risk attendant in purchasing stock, including that the company “may be forced to cease operations” due to losses and cash flow problems, and purchasers “may find it extremely difficult or impossible to resell our shares.”
From in or about 2011 until in or about 2015, RALSTON and his co-conspirators engaged in the sale of fraudulent carbon credits and offsets. The boiler room callers appealed to victims by claiming that the investments would be environmentally friendly and help address the climate crisis. The victims were falsely promised that the carbon-related investments they purchased could be easily sold, carried no risk, and would yield a significant, short-term return. In fact, the carbon credits and offsets that were sold to the victims were fake and did not represent any actual carbon credits or offsets. RALSTON caused fraudulent carbon certificates to be created and sent to the victims.
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In addition to the prison term, RALSTON, 54, of Riviera Beach, Florida, was sentenced to three years of supervised released and ordered to pay restitution in the amount of $15,714,859 and forfeiture in the amount of $15,713,621.20.
Mr. Williams praised the outstanding investigative work of Internal Revenue Service-Criminal Investigation in this case.
This case is being prosecuted by the Office’s Money Laundering and Transnational Criminal Enterprises and Complex Frauds and Cybercrime Units. Assistant U.S. Attorneys Jessica Feinstein, Olga I. Zverovich, and David Felton are in charge of the prosecution.