Trio of former Hawaii residents indicted in $2.5M investment scam

A 40-year old man was arrested in California Friday after allegedly using a fake name and accent as part of a conspiracy to take more than $2.5 million from victims who believed they invested in a Swiss bank and other ventures.

The alleged swindlers only returned about $163,000, some of which was derived from the payments of other victims, according to the U.S. Department of Justice.

Starting in July 2015, Richard Patterson, aka Xavier Carter, used fictitious businesses called Hawaiian Crush, Inc., Aloha Aina, Ltd., Securities and Trust of Switzerland AG, aka FSTS, Red Rock Equity Group and Advance Development Group and bank accounts in Hawaii, Minnesota and South Dakota to anchor the scheme. Patterson used the name Xavier Carter, and a fake accent, to conceal his “prior criminal history involving investment fraud,” according to an Aug. 19 indictment unsealed last week.

Patterson was arrested on Feb. 11 in California. Dashawn Hill, 46, and Judy Ramos, 52, all former residents of Hawaii, were charged with Conspiracy and Wire Fraud, and Patterson and Ramos also were charged with money laundering, according to a news release from the U.S. Attorney’s office.

“Those who take money from investors by promising great returns in a short amount of time, with little or no attempt to generate such returns, should face serious consequences for their actions,” said U.S. Attorney for the District of Hawaii Clare E. Connors, in a news release.

At no point were Patterson, Hill or Ramos licensed to sell securities, do business in Hawaii, registered or licensed to carry out any of the transactions they promised the investors according to the indictment.

Patterson made an initial appearance in court in the Central District of California, according to the release. Ramos, a current Hawaii resident and Hill, who lives in Oklahoma, have not yet been arrested. Hill used Thoroughbred Research and Investments, Inc. to further his fake investment professional scheme. In 2015 and 2017 he unsuccessfully filed for bankruptcy under the business Classen Crown Investments Inc.

Ramos used the fake businesses Aloha Global and Sand and Sky Consulting to push her part of the alleged conspiracy,

The indictment alleges that starting in July 2015, Patterson, Hill and Ramos set up an “advanced payment scheme.” They would promise returns of 200 to 1000 percent on initial investments by setting up “lines of credit” or “non-recourse loans” with the investor’s money allegedly secured by gold or other means, according to the indictment.

The victim-investors that would hand over money, sometimes as much as $200,000, that would purportedly be used to generate much larger sums of money, sometimes within as little as 28 days, according to the indictment.

In one instance, on Apr. 14, 2017, an investor agreed to wire $100,000 to Patterson to invest in Aloha Aina which would then deposit $300,000 into an account for the investor at Patterson’s fake bank, FSTS within 28 days. Twenty-eight days after that, the investor was told in a signed memorandum, another $700,000 would be deposited, according to the indictment.

Patterson, Hill and Ramos, divided up the investors’ money and used it to pay the defendants’ personal expenses, including credit card bills, rent, entertainment, and other expenses, none of which were investments and had no potential to earn the returns promised to the investors, according to the news release.

“The alleged fraudsters preyed on our communities, targeting trusting families and local business owners for their own selfish gain. The FBI takes financial crimes very seriously and will bring its considerable resources to hold those who commit fraud accountable,” said Steven Merrill, FBI Special Agent in Charge o the Bureau’s Honolulu Division, in a statement.

He urged the community to use the FBI’s tip line at tips.fbi.gov to report fraudulent schemes and scammers.

If convicted, Patterson, Hill and Ramos each a sentence of up to 20 years imprisonment, and a fine of up to $250,000 for each count of conspiracy to commit wire fraud or wire fraud. Patterson and Ramos face up to 10 years imprisonment and a fine of up to $250,000 for each count of money laundering.

The case was investigated by the FBI. Assistant United States Attorney Michael F. Albanese is prosecuting the case.