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Mexican businessman pleads guilty to U.S. fraud charge
September 19, 2017 / 9:53 PM / 3 months ago

Mexican businessman pleads guilty to U.S. fraud charge

NEW YORK (Reuters) - A former partner and part-owner of Mexico’s InvestaBank SA pleaded guilty on Tuesday to a U.S. charge that he and others fraudulently obtained $21 million in tax refunds from the Mexican government.

Carlos Djemal, 57, pleaded guilty to wire fraud before U.S. District Judge Alvin Hellerstein in Manhattan after reaching an agreement with U.S. prosecutors. Under the deal, the prosecutors agreed to drop related money-laundering charges.

The deal includes an order that Djemal forfeit $21 million, and he agreed to sell a mural in his Mexico home to help make that payment.

Djemal also agreed that he would not appeal any prison sentence of 121 months or less.

His lawyer, Ronald Fischetti, said he hoped Djemal would soon be allowed to return to Mexico, where he has not been criminally charged.

“Nobody lost a penny here in the United States,” Fischetti said.

Djemal was arrested in November 2016 along with three others accused of taking part in the scheme, Daniel Blitzer, Max Fraenkel and Roberto Moreno. Blitzer and Fraenkel have since pleaded guilty, while charges remain pending against Moreno, according to a spokesman for prosecutors.

Djemal was formerly a partner and 25 percent owner of InvestaBank, which was established in 2014 from a Mexican banking group’s acquisition of Royal Bank of Scotland’s (RBS.L) operations in Mexico. A spokeswoman for the company said Djemal’s involvement with InvestaBank ended in January.

Last November’s arrests briefly halted InvestaBank’s planned acquisition of Mexican Deutsche Bank (DBKGn.DE) subsidiaries. The company said in March that it would go ahead with the acquisition, after Mexican banking regulators cleared it of wrongdoing in connection with the U.S. charges.

Prosecutors said that from 2011 to 2016, Djemal and the three other defendants fraudulently claimed tax refunds from the Mexican government by purchasing outdated cellular phones through front companies and selling them to front companies in the United States.

Exporting certain products, including cellular phones, from Mexico allows Mexican companies to claim tax refunds.

Prosecutors said that once the phones reached the United States, they were shipped back to Mexico so they could be used in the same way again. The scheme ran from 2011 to 2016, according to prosecutors.

In the course of the scheme, the Mexican government paid out about $21 million in tax refunds to the front companies, and the defendants moved more than $100 million through accounts maintained by those companies, prosecutors said.

Reporting By Brendan Pierson in New York; Additional reporting by Noe Torres in Mexico City; Editing by Dan Grebler

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