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California Man Sentenced for Creating Alleged Equipment Leasing Company

June 18, 2015, 07:05 AM
Filed Under: Industry News
Related: Fraud

U.S. District Court Judge Michael W. Mosman sentenced Bryan Scott Gunn, 40, of Victorville, California, yesterday to 20 months in prison for coning investors out of almost $1 million. Judge Mosman also sentenced Gunn to serve three years of supervised release and ordered him to pay $939,308 in restitution.

According to court documents, Gunn was a fairly sophisticated conman. In fact, in this case, Gunn executed a con within a con. For the first scam, Gunn convinced his victims to invest more than $500,000 in an alleged heavy equipment leasing company, Republic Funding LLC, gaining the investors’ trust with charm and lies of a high rate-of-return. During the scheme, Gunn showed the investors documentation that falsely showed the alleged company was profitable. Gunn diverted the investors’ money for his personal use; among other things, he spent the money on a home, a condo, the construction of a luxury pool, travel, a Mercedes Benz, and his girlfriend. When the investors began to seek a return on their investment and began to challenge Gunn’s claims about the alleged business, Gunn started his second swindle—a clever and rather elaborate attempt to cover up his diversion of the investors’ money.

Gunn created two fictitious companies, a few fictitious employees, and a fictitious attorney, including corresponding e-mail accounts, to conceal his fraud. Gunn told the investors that he had sold the equipment leasing business’ portfolio to one of his fictitious companies, CMC Funding. When the investors sought payment from the sale of the portfolio, Gunn explained that CMC Funding had filed for bankruptcy and that its assets, including the portfolio, were being purchased by Fidelity LLC, Gunn’s other fictitious entity. Gunn, using letters and e-mails, posed as employees of Fidelity and as an attorney, and falsely claimed that costs associated with the bankruptcy needed to be paid before the investors could receive any payment for the alleged purchase of the portfolio. The investors fell for Gunn’s second scheme and paid more than $411,000 in an attempt to recover some of their investment. Gunn continued to use their money to live lavishly.

At one point, in an attempt to appease the investors, Gunn created and gave two bogus checks to the investors as a payout. The checks, one for $314,113 and the other for $1,169,887, appeared to be issued from CMC Funding and to be drawn on an account at SEIU Federal Credit Union. After depositing the checks, the investors quickly learned that the checks were fraudulent and that the account at SEIU Federal Credit Union did not exist.

This case was investigated by Internal Revenue Service-Criminal Investigation and the Federal Bureau of Investigation. It was prosecuted by Assistant U.S. Attorney Scott E. Bradford.

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