By Ogozi John
At last, victims of the decade-long Ponzi scheme perpetrated by the now convicted Sacramento-based businessman, Deepal Wannakuwatte will finally have some reprieve, as a federal judge has ordered that he pays millions of dollars in restitution to the victims.
For more than 10 years, Wannakuwatte used several false claims to deceive his investors and lenders that they were putting in funds to support the growth and expansion of his companies. He succeeded in fraudulently obtaining more than $230 million from at least 150 victims that included individuals, businesses, government agencies and financial institutions.
It took more than one year of painstaking investigations by the FBI, Internal Revenue Service Criminal Investigation and the Department of Veterans Affairs Office of Inspector General, for law enforcement to finally unravel how the scheme worked.
Wannakuwatte told his victims that his companies, International Manufacturing Group (IMG) and Relyaid Global Health Care were doing business worth tens of millions of dollars in the manufacture and sales of latex gloves to federal agencies like the Department of Veterans Affairs (VA).
Wannakuwatte then offered several bogus high-yield investment opportunities to the investors and lenders, most of which were tied to his ‘juicy’ contract with the VA.
Although, IMG which had been in operation for more than 25 years actually had a business contract from the VA, it was worth about $25,000 a year. IMG had been running on huge losses for several years and Wannakuwatte was barely keeping the company afloat with proceeds of the scheme.
He mixed several false and authentic documents, overstated personal and business income, and set up conference calls between himself, investors and a fake representative of the VA, all in a bid to convince his victims to lend him money.
Initially, Wannakuwatte was able to make payments to some of the investors with the proceeds from the other businesses that he diverted their investments into, but he could not sustain these payments, as many of the investors began to suffer devastating losses, while Wannakuwatte bought luxury homes, vehicles, airplanes and even a professional tennis team.
Wannakuwatte, who pleaded guilty last year, is currently serving a 20-year sentence in a federal prison from where he has been ordered to pay millions in restitution to victims of his fraud scheme.