Score:   1
Docket Number:   D-NJ  2:19-cr-00676
Case Name:   USA v. TORRES
  Press Releases:
NEWARK, N.J. – A Passaic County, New Jersey, man was charged today for a multi-million dollar bank fraud and securities fraud scheme operated through his company, Cash Flow Partners LLC (Cash Flow), U.S. Attorney Craig Carpenito announced.

Edward Espinal, 44, of Wayne, New Jersey, was charged by complaint with one count of conspiracy to commit bank fraud and one count of securities fraud. He is scheduled to have his initial appearance this afternoon before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court.

According to documents filed in this case and statements made in court:

The Bank Fraud Conspiracy

Espinal was the founder and chief executive officer (CEO) of Cash Flow, and controlled the company’s operations. From March 2016 through December 2019, Espinal led and directed a bank fraud conspiracy designed to obtain millions of dollars in loans from banks on the basis of false representations. To attract customers, Cash Flow released internet advertisements and held seminars offering to assist customers with low-paying salaries in obtaining loans. These advertisements included promotional videos featuring Espinal and a former telenovela actor. Customers contacted Cash Flow and were routed to the company’s sales department.

Employees in the sales department then encouraged customers to sign up for various loan programs that Cash Flow provided and to enter into contracts with Cash Flow. Under those contracts, employees would help customers obtain loans from banks. The Cash Flow contracts permitted customers to keep a portion of the loan proceeds and customers agreed to provide the remaining percentage of the proceeds to Cash Flow. Cash Flow agreed to pay off the loans on behalf of its customers.

Cash Flow then used false information and fraudulent document to obtain loans for its customers for which they otherwise would not have qualified, and posed as the customers in communications with the banks.

The Securities Fraud Scheme

From July 2016 through September 2019, Espinal obtained more than $5 million in investments from victim investors on the basis of false and fraudulent pretenses and representations.

Espinal solicited investments from prospective customers using a marketing campaign on Spanish language television channels and the internet, the “Cash Flow TV” YouTube page, and live presentations in Cash Flow’s offices and elsewhere. Espinal also solicited investments from individuals who obtained loans through Cash Flow’s bank fraud conspiracy, encouraging loan customers to invest loan proceeds in Cash Flow’s investment program. Once investors agreed to invest in Cash Flow, Espinal issued “promissory notes” to investors that guaranteed monthly investment returns between 1.25 percent and 4 percent. The promissory notes stated that Cash Flow would return investors’ principal either one year from the date of the promissory note, or 60 days after investors demanded payment. Espinal and other Cash Flow employees signed the promissory notes on behalf of Cash Flow.

Espinal made a number of misrepresentations to investors. He told investors that he would pool their funds with the funds of other investors in investments related to real estate, real estate companies, a gold mine in Ecuador, and construction projects in countries outside of the United States. In reality, Espinal used investor funds to pay returns to earlier investors, to pay for personal expenses for himself, his family, and another Cash Flow employee, to perpetuate the bank fraud scheme, and to market the bank fraud and investment scheme to future victims. Espinal falsely claimed that Cash Flow’s purported real estate fund, Cash Flow Capital, was “licensed” by the Securities and Exchange Commission. He guaranteed monthly returns on investment based on the purported proceeds from the sale of properties in Cash Flow’s investment portfolio. In reality, Espinal did not sell Cash Flow properties, so no profits were derived from the sale of Cash Flow properties.

Two other individuals, Raymundo Torres and Jennie Frias, have previously been charged for their roles in the Cash Flow bank fraud conspiracy. Torres has pleaded guilty.

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The securities fraud counts carry a maximum penalty of 20 years in prison and a $5 million fine.

Individuals who believe they may have information about this case may contact the FBI at 1-800-CALL-FBI (225-5324).

The U.S. Securities and Exchange Commission (SEC) also filed a civil complaint against Espinal today based on the allegations underlying the securities fraud charge.

U.S. Attorney Carpenito credited special agents of the FDIC-Office of the Inspector General (FDIC-OIG), under the direction of Special Agent in Charge Patricia Tarasca in New York, and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s charges. He also thanked the SEC for the assistance provided by its Enforcement Division.

The government is represented by Assistant U.S. Attorneys Ari B. Fontecchio of the Economic Crimes Unit and J. Stephen Ferketic of the U.S. Attorney’s Office Opioid Abuse Prevention and Enforcement Unit in Newark.

The charges and allegations contained in the complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Defense counsel: Telesforo Del Valle Esq., New York

NEWARK, N.J. – A Bergen County, New Jersey, woman has been charged for her role in a conspiracy that involved the creation of false documentation to secure over $4 million dollars in bank loans, U.S. Attorney Craig Carpenito announced.

Jennie Frias, a/k/a “Jennie Castillo,” 36, of Englewood, New Jersey, was charged by complaint with one count of conspiracy to commit bank fraud. Frias had her initial appearance Sept. 25, 2019, before U.S. Magistrate Judge James B. Clark III in Newark federal court and was released on a $100,000 unsecured bond.

According to documents filed in this case and statements made in court:

Between March 2016 and May 2018, Cash Flow Partners LLC, a business consulting firm with offices in New York and New Jersey, released internet advertisements and held seminars offering to assist customers in obtaining bank loans, including loans insured by the Federal Deposit Insurance Corporation (FDIC). When customers submitted documentation supporting their bank loan applications to Cash Flow Partners, Frias and others created false documentation to make customers’ loan applications appear more financially viable than they actually were. Employees in Cash Flow’s “File Building Department” falsified payroll records by including fictitious financial and employment information, such as fake jobs, on template payroll forms and IRS tax forms. Then, employees in Cash Flow’s “Funding Department,” of which Frias became director, took steps to pose as the loan applicants when communicating with the victim banks. For example, Funding Department employees remotely controlled computers located at the homes of the loan applicants to submit documents to the banks. Funding Department employees also took possession of the loan applicants’ cell phones and communicated with the banks posing as the loan applicants. The victim banks sustained losses of over $4 million.

One of Frias’ conspirators, Raymundo Torres, pleaded guilty Sept. 24, 2019, to charges relating to his role in the Cash Flow bank fraud conspiracy.

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine.

Individuals who believe they may have information about this case may contact the FBI at 1-800-CALL-FBI (225-5324).

U.S. Attorney Carpenito credited special agents of the FDIC-Office of the Inspector General (FDIC-OIG), under the direction of Special Agent in Charge Patricia Tarasca in New York, and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Ari B. Fontecchio of the Economic Crimes Unit and J. Stephen Ferketic of the U.S. Attorney’s Office Opioids Unit in Newark.

The charge and allegations against Frias are merely accusations, and she is presumed innocent unless and until proven guilty.

Defense counsel: John D. Arseneault Esq. and John J. Roberts Esq., Chatham, New Jersey

NEWARK, N.J. – A New York man today admitted participating in a scheme that involved the creation of false documentation to secure over $4 million in bank loans, U.S. Attorney Craig Carpenito announced.

Raymundo Torres, 35, of New York City, pleaded guilty before U.S. District Judge Kevin McNulty to an information charging him with one count of conspiracy to commit bank fraud.

According to documents filed in this case and statements made in court:

Between March 2016 and May 2018, Cash Flow Partners LLC, a business consulting firm with offices in New York and New Jersey, released internet advertisements and held seminars offering to assist customers in obtaining bank loans, including loans insured by the Federal Deposit Insurance Corporation (FDIC). When customers submitted documentation supporting their bank loan applications to Cash Flow Partners, Torres and others created false documentation to make customers’ loan applications appear more financially viable than they actually were. Employees at Cash Flow Partners falsified payroll records by including fictitious financial and employment information, such as fake jobs, on template payroll forms and IRS tax forms. Victim banks sustained losses of over $4 million.

The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. Sentencing is scheduled for Jan. 8, 2020.

Individuals who believe they may have information about this case may contact the FBI at 1-800-CALL-FBI (225-5324).

U.S. Attorney Carpenito credited special agents of the FDIC-Office of the Inspector General (FDIC-OIG), under the direction of Special Agent in Charge Patricia Tarasca in New York, and special agents of the FBI, under the direction of Special Agent in Charge Gregory W. Ehrie in Newark, with the investigation leading to today’s guilty plea.

The government is represented by Assistant U.S. Attorneys Stephen Ferketic of the Opioids Unit and Ari B. Fontecchio of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

Defense counsel: Joshua P. Cohn Esq., Saddle Brook, New Jersey

Description: The fiscal year of the data file obtained from the AOUSC
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Description: The code of the federal judicial circuit where the case was located
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Description: The code of the federal judicial district where the case was located
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Description: The code of the district office where the case was located
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Description: A unique number assigned to each defendant in a case which cannot be modified by the court
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Description: Case type associated with the current defendant record
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Description: A concatenation of district, office, docket number, case type, defendant number, and reopen sequence number
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Description: A concatenation of district, office, docket number, case type, and reopen sequence number
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Description: A code used to identify the nature of the proceeding
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Description: The date when a defendant first appeared before a judicial officer in the district court where a charge was pending
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Description: The four digit D2 offense code associated with FTITLE1
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Description: A count of defendants terminated excluding interdistrict transfers
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Description: A count of defendants pending as of the last day of the period excluding long term fugitives
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Data imported from FJC Integrated Database
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