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April 24, 2014

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Man sentenced to 10 years in loan fraud scheme

U.S. District Judge Philip Pro today sentenced former Las Vegas resident Casey Luczak on Wednesday to 10 years in prison and ordered him to pay $4.2 million in restitution for operating an “advance fee” loan fraud scheme, Nevada's U.S. Attorney Daniel Bogden said today.

Luczak, 72, currently of Atlanta, defrauded more than 50 victims between 2002 and 2005 through his Nevada-based business entities The Interchange Group and Gemini Capital Fund. He pleaded guilty on Jan. 19 to 23 counts of wire fraud and one count of making a false statement.

On Interchange's website and in various marketing materials, Luczak falsely promised victims that in exchange for substantial advanced fees, that company and Gemini would provide funding for business loans or collateral that could be used to obtain traditional bank loans. Luczak fabricated or grossly exaggerated Interchange's and Gemini’s staff and experience, financial portfolio, and history of investing in and funding companies seeking business loans. Luczak provided victims phony references, fabricated “certificates of achievement” with the Better Business Bureau, listed staff and domestic and foreign offices that did not exist, and falsely represented that Interchange and Gemini owned and managed funds available for investment in excess of $180 million.

Relying on the false representations, individuals entered into contracts with Luczak and wired or mailed to him more than $1 million in fees for the purpose of securing business loans, direct equity investments, and collateral. Rather than using the fees to provide funding or genuine collateral as promised, Luczak used the money to purchase luxury automobiles, including a Ferrari, Dodge Viper, and a Corvette, and for other items, such as a Steinway piano, personal residences, personal travel, fine dining and entertainment, and extensive gambling.

When victims failed to receive loans or the collateral promised, Luczak refused to refund their money, fraudulently claiming that victims were not entitled to refunds, or stringing victims along with false promises that their loans were forthcoming when he knew that the loans or collateral would never materialize. When victims eventually complained to the Better Business Bureau or law enforcement, Luczak attempted to intimidate them into retracting complaints by threatening to place their loan projects “on hold” and using other coercive tactics.

As a result of being financially victimized by Luczak, many victims were forced into personal and business bankruptcy, while other victims were unable to implement their business plans because their only available loan funds had been exhausted by Luczak.

On April 26, 2005, an FBI special agent investigating complaints of the victims questioned Luczak regarding his business practices with Interchange and Gemini Capital. Luczak falsely told the agent that he had used the fees he received from victims to help find loans, for collateral, and to pay project directors. He also told the agent he used the fees to conduct due diligence examinations of victims’ companies when he knew that he had not used their money for such purposes. Instead, he converted the vast majority of victims’ fees to his own personal use in order to support a luxury lifestyle.

Luczak is currently released on bond with conditions of home confinement, and must self-report to federal prison on June 29.

The case was investigated by the FBI and prosecuted by Assistant U.S. attorneys Christina Brown and Roger Yang.

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