May 19, 2014
By Bob Coleman
Editor, Coleman Report
Last month, I wrote about the alleged fraud of Deepal Wannakuwatte against Bridge Bank.
You can drop the word alleged.
Deepal has pled guilty to one count of bank fraud and is facing 20 years in prison, along with the usual forfeiture of all assets.
Our initial coverage:
And today’s subject is a true character alleges the FBI. They say he ran his medical supply company out of a 60,000 square foot facility that was bustling with staff in fully furnished offices, racks of inventory and several freight trucks.
Literally living a jet setting lifestyle flying all around the country with his $3 million plane, our perp also owns the Sacramento Capitals, a World Team Tennis franchise.
Well owned. Seems he lost his franchise when he was arrested last month for bank fraud. And GE wasn’t happy they couldn’t find the plane or the loan payments, so they sued last month to get it back.
And those offices? – all a mirage, as investors who sunk at least $7 million in the company are finding out.
But the best con, or saddest con if you happen to be San Jose-based Bridge Bank, is right out of “The Sting.”
The bank wanted to know more about $25 million in receivables that were outstanding with the VA for sales of latex gloves. That would seem to be a lot of gloves, but I digress.
Deepal Wannakuwatte set up a conference call with the bank and the VA. The VA confirmed there were more than 60 invoices outstanding for $25.8 million.
The bank then approved a $4.5 million line of credit.
Unfortunately, there were no such invoices. Seems an employee of Mr. Wannakuwatte acted as the VA rep. Wasn’t a total waste though, he got a $100 gift card and a bottle of wine for his trouble, so says the FBI.
Oh, and that reviewed opinioned financial statement the bank used? The CPA whose name was on the cover, never saw it. Seems Deepal is allegedly good at the Photoshop game also.
Says the Feds in their press release;
In all, Wannakuwatte ultimately obtained well over $150 million from his victims. Contrary to his representations, Wannakuwatte used much of the money he obtained to pay himself and his family, make lulling payments to participants in his fraudulent investment schemes, and pay outstanding debts unrelated to his false representations.
“Mr. Wannakuwatte’s guilty plea brings to an end to one of the longest running, most extensive, and most damaging fraud schemes our region ever has seen,” said U.S. Attorney Wagner. “We are still calculating the total damage resulting from his scheme, but he caused well over $50 million in losses, and the total losses could be closer to $100 million. Together with the FBI and the IRS, our office moved swiftly to ensure not only that he would be held accountable for this crime, but also that we could take all steps possible to return remaining funds to his victims. The very substantial sentence that he is likely to receive should send a clear message that my office will continue to prosecute financial crimes like this one vigorously.”