Former Maui couple go
to Guam to face chargesThey allegedly took money for
fraudulent overseas investments
A former Maui couple were indicted yesterday on multiple federal charges of wire fraud stemming from a scheme that cost investors $120,000 to recoup earlier investment losses.
John and Janeth Cerizo, formerly of Wailuku, were arrested in southern Davao City on May 27, Assistant U.S. Attorney William Shipley confirmed.
When the couple arrives on Guam, federal officials will serve them with a warrant for their arrest, Shipley said. The Cerizos likely will make an appearance before a federal magistrate on Guam before they continue to Hawaii.
The 12 wire fraud charges stem from e-mails the Cerizos sent to investors between February and August 2003 soliciting money and updating them on efforts to locate valuable commodities in the Philippines that could be used to reimburse them for earlier losses.
According to the indictment, beginning in 1998, John Cerizo worked as a securities broker/agent for Massachusetts Mutual Investors Services Inc., selling life insurance and other investments to clients on Maui. Part of his job was teaching "Successful Money Management" seminars at Maui Community College for adults interested in retirement planning and investing.
In December 1999, Cerizo and his wife allegedly began marketing a "high yield, no risk" overseas investment that would be tax-free because the investment was made in a foreign country. Cerizo solicited students in his money management classes to invest in the program.
Between December 1999 and July 2002, about 50 investors transferred more than $5 million to foreign bank accounts in Switzerland and Hong Kong with the Cerizos as signatories, the indictment said. Some invested more than once. Some investors apparently received wire transfers of money into their accounts representing a fraction of the return on their investment.
But in December 2001, Cerizo informed an investor that the money transferred to the overseas accounts had been "lost" and he would have to go to the Philippines to try and recoup some or all of the money. In a complaint filed on May 27, Cerizo claimed other individuals had defrauded them and the investors.
Cerizo moved to the Philippines in July 2002. His wife followed him in November 2002.
Between November 2002 and October 2003, Cerizo and his wife allegedly persuaded investors to fund a search for valuable Morgenthau bonds -- issued before World War II by the United States that were sent to the Philippines for safekeeping and remain hidden.
The search for Morgenthau Bonds is a well-known fraud scheme that is noted in many Internet Web sites, according to FBI Special Agent M.D. McDonald.
The FBI began investigating the Cerizos in August 2003. When contacted by the FBI, Cerizo told McDonald he had convinced about 75 individuals to invest about $5 million into the overseas investment program but couldn't remember where all the money went.
Wire fraud is punishable by maximum penalties of 20 years imprisonment and $250,000 fines per count.