Originally scheduled to begin on April 18, 2016, the trial has been delayed until October 17, 2016 in Las Vegas, Nevada.
Buckhannon was arrested on October 1, 2014 by FBI agents at a Henderson, Nevada coffee shop, and charged along with co-defendant Terry Rawstern with one count of conspiracy to commit wire fraud and one count of wire fraud.
If convicted, Buckhannon and Rawstern could face up to 30 years in prison on the conspiracy charge, and up to an additional 20 years in prison on the wire fraud charge. According to the indictment, from April 2008 through April 2010, Buckhannon and Rawstern, along with some other co-conspirators, managed members of two Bradenton, Florida-based hedge funds, Arcanum Equity Fund, LLC and Vestium Equity Fund, LLC.
The Department of Justice said at the time of Buckhannon's arrest that the defendants engaged in a fraudulent scheme to misappropriate $34 million they raised from investors by misrepresenting how they would use the investors' funds, along with misrepresenting that there were safeguards over the investors' money, such as an independent trustee and independent fund administrator. According to the DOJ, the defendants looted and bankrupted the hedge funds by taking payments on false and fictitious profits, while taking improper and undisclosed loans. The indictment stated that as a result of the defendants' conduct, investors lost approximately $13.1 million.
A stipulation motion filed by Buckhannon's attorneys and signed October 28, 2015 by U. S. District Court Judge James C. Mahan states that “the discovery process is still ongoing”. Buckhannon's attorneys have “determined that there are 745,000 pages of discovery and 297 GB of data provided by the government. Given the volume of discovery it will take at least 2 people 3 months to fully review and upload into the Concordance program.”
Attorneys for Buckhannon claim “there are approximately 135,000 pages missing which need to be produced by the government and giving the fact that the due date for the pretrial motion is quickly approaching counsel for Mr. Buckhannon and Mr. Rawstern do not have sufficient time to review the discovery in its entirety, and adequately determine whether there are any pretrial issues that must be litigated.”
And in other Buckhannon-related news, the fraud trial of shadowy UK con man Joseph Birch and his wife Grit kicks off on February 29, 2016. Accused of swindling rich American investors out of millions and dollars and laundering the cash through their stables in North Devon, Birch has a direct connection to Buckhannon via the pending case of Kari Sonovich.
Birch is in custody, and a Judge at Exeter Crown Court approved his continued detention until the trial, which has been moved to Plymouth because of lack of court time in Exeter. Birch, aged 62, of Horns Cross, near Bideford, and his wife Grit, aged 45, now of Exeter, have pleaded not guilty to a total of eight counts of fraud or money laundering.
The couple are accused of paying £734,149.66 for cars, furniture and building work at the stud farm at Higher Lowton Farm, Bondleigh, North Tawton, with the proceeds of fraud in 2005.
They are both charged with five frauds by false representation involving £6.25 million between 2003 and 2010, one count of possessing articles for the use in fraud, and two of money laundering a total of £2.5 million.
The frauds involve allegedly obtaining large amounts from investors who put money into ‘private placement programmes’ between in 2007 and 2009. The total amounts in the fraud and laundering charges amounts to £9 million.
So where's the connection to Buckhannon?
Here it is.
Buckhannon associate Kari Sonovich was arrested in California on February 6, 2014 on three counts of mail fraud. A status conference previously schedule for Tuesday, July 28, 2015, has now been pushed back to Tuesday, December 15, 2015. The Sonovich case has already had two of these orders “to continue to exclude time pursuant to the Speedy Trial Act”, providing time for “adequate attorney preparation” to review the growing mountain of discovery produced in the case.
The government has already produced a CD with 10,970 pages of discovery, along with the estimated 65,000 pages of discovery stemming from related cases. In addition, the government had issued to Google a search warrant for two email addresses, and produced seven DVD’s of information delivered in zip drive — for those of you following along at home, that means a lot of information!
And in June, the government produced additional discovery — emails from Google of the Gmail account of one Joseph Birch.
Kari Sonovich’s indictment detailed three wire transfers totaling $345,000 that occurred on February 5 and February 6, 2009.
According to the January 30, 2014 indictment (unsealed after her arrest), between July 2008 and April 2009, Sonovich recruited investors to invest with her Las Vegas company, B&B Consulting Group LLC, by telling them she could place their funds with an “international trader who operated at an extremely high level”, promising returns of up to 500 percent every 90 days.
When investors deposited funds with her, Sonovich kept some or all of the funds for herself. The indictment alleged that Sonovich received more than $3 million from investors. To date, no investor has received the promised returns, and in most or all instances, no investor received any of their initial investment back.
Some investors in Sonovich’s scheme became involved at the same time that an earlier investment fraud scheme in which they had invested was collapsing — a Ponzi scheme run by associates of Robert Buckhannon, Anthony Vassallo and Kenneth Kenitzer, through their company Equity Investment Management & Trading (EIMT).
Both were convicted for that scheme, and Vassallo is serving a 16-year prison sentence. Kenitzer was sentenced to a 6-year prison term on February 14, 2014.
Sonovich recruited EIMT investors while she was in Las Vegas, Nevada and Sacramento, California beginning around July 2008 and continuing at least through April 2009. Court documents indicate Sonovich gave investors “materially false statements” to induce them to part with their funds.
Sonovich claimed that she could help the EIMT investors recoup their losses by investing with a “Sir Joseph Birch”, a man who supposedly had a warehouse full of gold bars.
Sonovich falsely told investors Birch “would return anywhere between 250 to 500 percent every 90 days”. Sonovich falsely represented that she would be paid solely out of the investors’ profits. She told investors that after each 90 day cycle, they would have the opportunity to pull their investments out, leave the investments and profits invested for continuing 90 day periods, or pull out a portion and leave the remainder for an additional 90 day period.
But Sonovich didn’t tell the former EIMT investors who gave her in excess of $3 million dollars was that she did not wire the funds to the shadowy financier “Sir Joseph Birch”—she sent most of the money to her personal bank account and that of a “managing member” of B&B Consulting described in the indictment only as “B. W-E”.
In most instances, court documents state, the investors sent funds to Sonovich through one of two bank accounts: a B&B Consulting Group, LLC business account at Charles Schwab or her personal bank account at Nevada State Bank.
However, on three instances, funds were wired directly to an overseas account associated with a man who called himself “Sir Joseph Birch”.
In one of those instances, the wire originated from an individual, “R. B.” The indictment stated that “R. B.” was “induced to wire the funds to J.B. by individuals acting in coordination with Sonovich”, who gave “R. B.” the impression that the wired funds belonged to EIMT, whose investors, after the collapse of EIMT, wished the funds to be transferred to “Sir Joseph Birch”.
The “R. B.” in the Sonovich indictment is none other than Battle Creek’s “crooked chiropractor”, Robert Buckhannon, currently under federal indictment for his role in a $34 million dollar hedge fund fraud.
Funny that the Brits are heading to trial before Buckhannon and Sonovich!
(Wonder what ever happened with that arson investigation in Battle Creek?)