7 Charged After Alleged Role In Advance Fee Loan Scheme: SCDA

HAUPPAUGE, NY—Seven people were arrested and charged on Wednesday in connection with an alleged advance fee loan scheme that impacted over 35 identified victims across the United States, Suffolk County District Attorney Tim Sini announced.

The investigation had gone on for over a year and included the use of court-authorized eavesdropping as well as audits of financial records and physical and electronic surveillance.

"This case involved many disparate complaints from all over the country, and the investigators and prosecutors were able to piece that information together and figure out that this was the same scheme and the same group of people operating under different names," Sini stated via press release.

The alleged criminal enterprise and boiler room operation was led by Demetrios Boudourakis, also known as "Jimmy," 45, of Farmingdale. He was charged with second-degree grand larceny (a C felony), four counts of third-degree grand larceny (a D felony), two counts of fourth-degree money laundering (an E felony) and first-degree scheme to defraud (an E felony).

Johnson Joseph, 38, of Brentwood, was charged with two counts of third-degree grand larceny, fourth-degree money laundering and first-degree scheme to defraud.

Christopher Looney, 21, of Bethpage, was charged with third-degree grand larceny and first-degree scheme to defraud.

Nadim Afzali, 30, of Hicksville; Tanya Balbi, 39, of Farmingdale; Jude Brun, 36, of Elmont; and Michelle Soccodato, 31, of Hicksville, were each charged with one count of first-degree scheme to defraud.

The investigation turned up evidence that Boudourakis and his co-conspirators allegedly operated an advance fee loan fraud scheme since as early as October 2016. The defendants would offer loans to their targets in exchange for advance fees and then collect the fees without providing the loans. To date, the scheme has generated over $2 million of stolen proceeds.

The conspiracy targeted small businesses and operated as a boiler room, typically reaching victims through cold calling and then using high-pressure sales tactics to sell them the fraudulent loans.

"This criminal enterprise has had devastating impacts on the identified victims," Sini said. "What the perpetrators did here was they used the Internet and other tactics to identify vulnerable individuals who were recently denied a loan, usually because they had a bad credit score, and then offer them an opportunity, but that opportunity came at a high cost."

The defendants allegedly used check cashing establishments to launder the advance fees, which were usually paid through cashier's checks, wire transfers or other forms of payment, and converted them to cash. The defendants would abruptly stop communication with the victims once the fees were converted to cash.

"These individuals weren’t stealing from the rich; they were stealing from small businesses and ordinary people," Sini said. "What we're asking the public to do is be vigilant. If something seems too good to be true, it is. Do your research before you send money to any type of company or corporation and be skeptical of advance fees and interest payments. If you believe you are a victim who has been defrauded by these defendants, we are asking you to please contact my office."

From 2016 through early 2018, Boudourakis allegedly ran the scheme out of a boiler room located at 535 Broadhollow Road in Melville. In May 2018, Boudourakis vacated that location and re-established his operation at "Federal Business Lenders," a storefront located at 3430 Merrick Road in Seaford.

The scheme was also ran through shell companies and under other business names, such as Federal Business Funding, JTT Funding, JTT Global Holdings, Inc., Acceleration Capital Group, Blackrock Funders, Inc. and Blackrock, Inc.

Search warrants were conducted by law enforcement agents at several locations tied to the scheme on June 11 and June 12. Federal Business Lenders, Boudourakis’ residence located at 148 S. Front St. in Farmingdale, a residence located at 41 James St. in Hicksville, a storage unit located at 305 Del Drive in Farmingdale and a storage unit located at 47 Broadhollow Road in Melville were all searched. Electronic equipment, three handguns, a sawed-off shotgun and a pill press were found.

If Boudourakis is convicted, he faces a maximum prison sentence of up to 44 years.

If convicted of the top count, Joseph and Looney each face a maximum sentence of 2 1-3 to seven years in prison. Soccodato faces a maximum prison sentence of two to four years. Afzali, Balbi and Brun each face a maximum sentence of 1 1-3 to four years in prison.

"As alleged, Demetrios Boudourakis operated a boiler room-style scheme by selling fraudulent loans to small businesses throughout the country," William F. Sweeney Jr., assistant director in charge of the FBI's New York division, said. "Promising victims they would receive a loan after advanced fees were paid, Boudourakis and his coconspirators took the money up front, but when it came time to pay up, communication went cold."