Securities Fraud Lawyer Blog
On March 5, 2015 a federal judge ordered Deepal Wannakuwatte to pay over $100 million in restitution to the victims of his decade long ponzi scheme. In November of last year Deepal Wannakuwatte was sentenced to 20 years in prison and ordered to forfeit multiple properties, vehicles, business interests, and bank accounts to be used to provide restitution to victims.
According to court documents, from 2002 to 2014, Wannakuwatte obtained well over $230 million from his victims, some of which he returned to them as “fake” profit payments. Most of the money raised was used by Deepal Wannakuwatte to pay himself and his family and pay outstanding debts unrelated to his false representations.
Wannakuwatte offered his investors several different bogus high-yield investment opportunities, and closed the sales by touting his relationship to the VA, and by showing his victims phony corporate documents, fraudulent tax returns, and bogus sales documents.
What made the scam believable was that Deepal Wannakuwatte’s company, IMG had been in business for more than 25 years allowing him to falsely claim that his companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. However, the IMGs contracts were for far less than represented, and Wannakuwatte actively misled investors with his story of multimillion dollar contracts.
According a press release by the federal government, this was the largest Ponzi scheme in Sacramento history. For more than decade, up until February 2014, Deepal Wannakuwatte fooled his investors and his lenders into believing that he was running a legitimate, profitable enterprise. The fraud began to unravel in September 2013, when an associate of Deepal Wannakuwatte contacted the U.S. Attorney’s office, which began an investigation.
The Law Office of David Liebrader has closely followed the developments in this case over the past year. Many of Deepal Wannakuwatte’s victims purchased investments through, or on the recommendation of licensed and unlicensed financial advisors. These financial advisors may have some liability for the sale of these investments, and investors should explore their options before the statutes of limitations run out. There may be an opportunity to pursue claims against these advisors and the firms that employed them.
The Law Office of David Liebrader practices exclusively in the field of investment loss recovery and our securities attorneys have successfully resolved over 1000 investment loss cases over the past 20 years. Recoveries for clients top $40 million. The types of claims we have successfully handled include those involving unsuitable investments (suitability claims), excessive trading or “churning”, misrepresentations and omissions, unauthorized trading, over-concentration of illiquid or overly risky investments, pump and dump scams involving “penny stocks”, direct participation programs (private placements) involving real estate investment trusts (REITS), oil and gas exploration programs, leasing equipment deals and receivable financing, promissory notes whether sold through a broker dealer or as part of the outside business activities of a registered representative, ponzi scheme losses, failure on the part of the broker dealer to perform due diligence, state securities law (blue sky) violations and failure to supervise.
If you have suffered investment losses please call The Law Office of David Liebrader at (702) 380-3131 for a free, confidential consultation