SL businessman denied bail in fraud case in US

7 March 2014 08:27 am - 7     - {{hitsCtrl.values.hits}}

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After listening to a prosecutor paint a bleak picture of Sri Lankan born Deepal Wannakuwatte’s chances of beating charges of orchestrating a $150 million fraud, a federal magistrate judge on Thursday ordered the Sacramento businessman back to jail without bail as a flight risk.
 
Wannakuwatte was arrested Feb. 20 on a criminal complaint charging conspiracy and fraud in connection with recruitment of investors for his distribution of disposable gloves and other medical supplies.
 
But investors did not realize the returns Wannakuwatte had promised. Instead, in a typical Ponzi scheme, he was passing out some of the funds from new investors to earlier investors to falsely make it appear the venture was paying off, according to court papers.
 
An FBI affidavit attached to the complaint says “probable cause exists to believe Deepal Wannakuwatte has committed and continues to commit violations” of conspiracy, mail fraud, wire fraud and bank fraud statutes.
 
“He’s a skilled manipulator and talented con man,” Assistant U.S. Attorney Michael Beckwith told U.S. Magistrate Judge Allison Claire at Thursday’s bail hearing. “He has the money, the connections and the motive to flee.”
 
Beckwith said Wannakuwatte has raked in $7 million from investors just in the past several months.
 
He also cautioned that Wannakuwatte’s release on bail could pose a risk to his safety, given the huge sums of money people let him talk them out of.
 
“Some lost hundreds of thousands of dollars, some lost millions, and some lost tens of millions,” Beckwith told Claire.
 
The prosecutor said Wannakuwatte has connections in China, which has no extradition treaty with the United States, and his native Sri Lanka, where, despite an extradition treaty, the United States has had no success extraditing accused criminals. Beckwith also noted that Wannakuwatte recently paid the arrears on his lease of a private plane in an attempt to gain control of the craft.
 
He said the defendant’s swindles “stretch from here to North Carolina,” and “it will be hard to refute the bank records” already gathered by FBI and IRS agents.
 
When the smoke clears, Beckwith said, the 63-year-old Wannakuwatte may be looking at a prison term that will keep him locked up for the rest of his life.
 
A one-time amateur tennis champion in Sri Lanka and a collegiate competitor in this country, Wannakuwatte acquired the Sacramento Capitals professional franchise of World TeamTennis two years ago.
 
On Feb. 4, less two weeks before his arrest, the Capitals announced they were moving to Las Vegas because they couldn’t find an adequate stadium locally. The league announced Wednesday that the franchise has been terminated.
 
Wannakuwatte seems incorrigible in that, even while in jail since his arrest two weeks ago, he has used his phone privileges to corral new investors and “move money around,” Beckwith said.
 
Defense attorney Donald Heller told the judge his client’s father-in-law is willing to pledge property with equity in excess of $300,000 to back up a bond for Wannakuwatte’s release pending trial. He also said the defendant’s daughter is ready to sign an unsecured bond for any amount chosen by the judge.
 
If he fled under those circumstances, Heller argued, he would leave his wife and daughter destitute.
 
Heller urged that Wannakuwatte be placed on electronically monitored home detention and allowed to leave his Land Park house only to meet with Heller. The attorney said it is difficult to prepare a defense for a white-collar case of this magnitude with the accused in jail.
 
Claire was not persuaded to free Wannakuwatte, saying the $300,000 of secured bail is not adequate to assure he will stick around for trial. She pointed out that his own substantial property holdings are worthless as collateral for bail because the government is seeking to take them.(The Sacramento Bee)
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  Comments - 7

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  • Fuzzy Friday, 07 March 2014 03:30 PM

    After he played amateur tennis, he should have joined Sri Lankan politics. Would have been much more wealthier and never got caught for swindling public money. via DM Android App

    jim pappa Friday, 07 March 2014 04:17 PM

    $150 million or 15 billion rupees ? Phew, What a guy !!

    Fawzan Friday, 07 March 2014 05:28 PM

    -Totally agreed with Palayang Yako, We entrusted this country to a con man who attempted to swindle Tsunami fund

    Nandimithra Friday, 07 March 2014 07:28 PM

    Yet another Sri Lankan bringing recognition to the motherland.
    Agree with the magistrate, he is definitely a flight risk. Keep him locked up till the trial. If he absconds, they would never see the
    likes of him ever again. Shyster.

    Palayang Yako Friday, 07 March 2014 11:33 AM

    PLEASE, PLEASE, Uncle Sam let him come home to Sri Lanka because once he becomes our country's next President, for which he has all the qualifications, he will be able to repay all your investors with the money he starts collecting here.

    magodis thuma Saturday, 08 March 2014 12:33 AM

    Presidential material..Rajapakse's need to adopt this conner.

    M.Muttha Sunday, 09 March 2014 01:19 PM

    Very soon we'll overtake the Nigerians in scams and financial frauds. via DM iPad app


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