SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced that James Abrams, age 39, of Easley, South Carolina, was indicted yesterday by a federal grand jury on wire and mail fraud, identity theft, money laundering, unlawful monetary transactions, obstruction of justice, and false statement offenses.
According to United States Attorney John C. Gurganus, the indictment alleges that Abrams, the owner and Chief Executive Officer of EthosGen LLC, provided forged documents and false information to induce several investors to invest $1,100,000 in his company. Abrams allegedly provided the potential investors with forged tax returns, false financial records, forged contracts with purported customers of EthosGen LLC, and a forged intellectual property license. The forged documents and false information inflated EthosGen LLC’s revenues, business activity, and profitability, thereby making it a more attractive investment. In addition to 19 charges of wire fraud and mail fraud, Abrams also faces five charges of aggravated identity theft, for forging signatures and using other individuals’ personal information on forged documents, without their authorization.
The indictment also alleges that Abrams concealed his scheme by providing forged bank account statements and false information to EthosGen LLC’s Chief Financial Officers and accounting professionals. Abrams is accused of using over $792,000 of the investors’ money to purchase a personal residence in South Carolina. To conceal his financial activities, Abrams alleged laundered $700,000 of the funds through a series of bank accounts under his control, before purchasing the residence. Abrams faces 13 charges of money laundering and unlawful financial transactions for his illicit financial activities.
Abrams also is accused of lying to his investors and former Chief Financial Officer that he had used the funds to purchase company inventory for EthosGen LLC. He allegedly provided investors with falsified company reports and accounting records to corroborate his misrepresentations about the use of the investment funds.
The indictment further alleges that, upon becoming aware of the Internal Revenue Service’s criminal investigation of Abrams, he took several steps to obstruct the investigation. Namely, he is accused of creating false documents and accounting records that purported to classify his embezzlement of investor funds as a shareholder loan, and faces four counts of obstruction of justice. He further was charged with seven counts of providing false statements to federal investigators, by lying about purchasing inventory for EthosGen LLC, claiming that EthosGen LLC owed him $800,000, stating that he provided his investors with truthful information when they evaluated his company during a due diligence process, and claiming ignorance about the origin of multiple forged contracts that he sent to investors.
The indictment seeks forfeiture of the funds Abrams secured from investors during the scheme, and of the residence he purchased with them in South Carolina.
The case was investigated by the Internal Revenue Service’s Criminal Investigations Division. Assistant U.S. Attorney Phillip J. Caraballo is prosecuting the case.
The maximum penalty under federal law for the most serious offenses are 20 years of imprisonment, a term of supervised release following imprisonment, and a fine. The aggravated identity theft charges carry mandatory, consecutive two-year minimum sentences of imprisonment. A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
Indictments are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
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