Collectively, the "target properties" named in the restraining order are alleged to constitute funds and criminal proceeds from money laundering and other unlawful monetary transactions and are therefore subject to forfeiture under US law ( Title 18, United States Code, Section 982, and Title 21, United States Code 853).
According to the federal indictment unsealed December 12, 2016, over the course of three years, Rienzi Edwards, Michael Jacobs (64), Ruby Handler-Jacobs (wife of Michael Jacobs) (64), Lawrence Lester (71), Rachel Gendreau (46), and Singaporean national F.K. Ho (80) impersonated officials of the Federal Reserve while they peddled their Cities Upliftment Program (CUP) scheme as a high-yield, risk-free “trading program,” run by the New York Fed and offered to only a select group of investors.
They claimed the investments were risk free because they were guaranteed by the United States government through purported "sovereign guarantees" issued by the cities to which half of the investment returns were to be directed. They also lured investors by claiming that the returns would not be taxed or that foreign investors would receive green cards. The scheme brought in an estimated $50 million, wired to accounts in the United States, Hong Kong and Sri Lanka.
“Edwards and his co-defendants allegedly concocted and carried out an audacious scam, promising investors exponential returns on investments they claimed were overseen by the New York Federal Reserve and backed by the U.S. government. In reality, it was all a lie,” U.S. Attorney for the Southern District of NY Preet Bharara said in a statement, December 13. “There was no government-backed program and no plan to invest, only an alleged plan to steal the investors’ money.”
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At least 12 investors were defrauded, Dawn Dearden, a spokeswoman for the Southern District of New York U.S. Attorney’s Office told SLE.