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Fraud Friday — Small Business Loan Brokers Indicted for $2 Million Fraud

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June 21, 2019

By Dominic J Bartolone
Contributing Editor, Fraud Friday

Fraud Friday — Small Business Loan Brokers Indicted for $2 Million Fraud

A New York man along with seven others, have been indicted and charged with running a fraud ring that bilked 35 small-business owners out of more than $2 million in advance fees in promise for funding.

The scheme targeted victims from around the country, with some as far away as Florida and California.

Demetrios “Jimmy” Boudourakis, 45, was charged with grand larceny, money laundering and other crimes for his role in an advanced fee loan scheme that took advantage of dozens of business owners, some individuals lost more than $100,000.

The year-long investigation run by several federal, state, and local law enforcement agencies resulted in the formal indictments, alleging Boudourakis and his associates used the dark web to obtain the names of small business owners who had previously been denied loans. They would then contact the victims and explain that they qualified for new loan programs, but that they would be required to pay interest and fees in advance.

Suffolk County District Attorney Timothy Sini says it was “a classic boiler room operation.” “There are criminal enterprises out there that make a living out of essentially identifying vulnerable individuals who can be preyed upon, essentially identifying potential victims,” Sini adds. “That is exactly what happened here.”

After the defendants received wire transfers or cashier’s checks for the advanced fees, they came up with excuses as to why the loans were not funding, or simply stopped taking the borrower’s phone calls.

Boudourakis pleaded not guilty at his arraignment on Wednesday, with Suffolk County District Judge Gaetan B. Lozito setting his bond at $1 million.

Sini says the alleged fraud began in October 2016, continuing non-stop until just recently. The fraud was run through several shell companies and dozens of websites, using catchy names related to business financing.

Five other defendants pleaded not guilty at the arraignment Wednesday. They include Nadim Afzali, 30, of Hicksville, NY, charged with scheme to defraud; Tanya Balbi, 39, of East Farmingdale, NY, charged with scheme to defraud; Christopher Looney, 21, of Bethpage, NY, charged with grand larceny and scheme to defraud; Johnson Joseph, 38, of Brentwood, NY, charged with grand larceny, money laundering, and scheme to defraud; and Jude Brun, 36, of Elmont, NY, charged with scheme to defraud.

Another defendant, Michelle Socodatao, 31, of Hicksville, NY, is charged with scheme to defraud and is scheduled to be arraigned Thursday.
The attorney for Nadim Afzali says his client only worked for Boudourakis for a short period of time and had “no knowledge of theft, if that is indeed what happened.”

“These individuals weren’t stealing from the rich, they were stealing from small businesses and ordinary people,” Sini says.

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

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