U.S. Attorney’s Office Announces Second Guilty Plea Related to Multi-Million Dollar Commercial Leasing Fraud Scheme

The U.S. Attorneys’ Office for the Eastern District of North Carolina announced that Armando Binelo of Pigeon Forge, TN, pled guilty for his role in a $20 million leasing fraud scheme. Daniel Raymond, of Mebane, NC, previously pled guilty to conspiracy to commit mail fraud and wire fraud in relation to the scheme and was sentenced to 84 months in prison. Binelo faces up to 20 years in prison when sentenced.

“Our assistant U.S. attorneys are hard at work in unraveling complex financial frauds like this one, where a computer equipment supplier billed financiers for millions in a scheme that lasted years,” Michael Easley, a U.S. attorney for the Eastern District of North Carolina, said. “The Research Triangle is a hub for tech and innovation. We are ramping up white collar fraud enforcement to ensure fraudsters who take advantage of our booming tech sector are held accountable.”

According to court documents and information presented in court, from March 2016 to January 2022, Binelo and Raymond allegedly executed a scheme to defraud financing companies in connection with computer equipment lease deals. The scheme’s targets were financing companies that offered small to medium-sized businesses (customers) financing and secured leases for computer servers and equipment. Under these leasing programs, financers paid for and took title to the equipment and then leased it to the customers for a fixed term. Financers entered into agreements with brokers who, for a fee, could bring potential equipment leasing opportunities to the financers for evaluation and approval. As a third-party independent financing source, financers did not manufacture or supply the computer equipment. Instead, the brokers, like Raymond, arranged for the purchase and delivery of the equipment to the customers, who then leased that equipment from the financers.

Raymond allegedly targeted financially distressed small business customers throughout the U.S. and offered them leases for computer equipment. Typically, the customers Raymond allegedly targeted were seeking a cash infusion for operating expenses and had no immediate need for computer equipment. Nonetheless, Raymond allegedly enticed customers by offering lease deals with large cash rebates and long-term payback options. Raymond also allegedly falsely assured customers that this was a common and legitimate practice and that they could always sell the computer equipment if they chose to. The cash rebates and payback options allegedly offered by Raymond were not known to or approved by the financers.

Raymond also allegedly executed the lease agreements with the customers and then submitted the leases and invoices to a financer. If approved, the financer paid Raymond a lump sum payment, which was intended to represent the cost of the computer equipment to be supplied by Raymond, plus a small fee to be retained by Raymond as profit. Once the leases were signed and approved by the financer, Raymond allegedly instructed the customers to create false documents that claimed the computer equipment had been delivered, installed and was operational at their business sites, despite no equipment being delivered or installed. These false declarations enabled the financier to pay Raymond. After Raymond obtained payment from the financers, the U.S. Attorney’s Office said he wired the cash rebates to the customers from his business checking account. The U.S. Attorney’s office also said that Raymond sometimes did ship computer equipment to the customers. However, whereas the leases called for name-brand computer servers and hardware valued between $30,000 to $100,000, Raymond allegedly sent cheap computer equipment and parts.

Raymond was affiliated with the following businesses: Integrity IT Solutions, Logos Consulting, Lendberry, US Server Supply, Online Concepts, Referral Marketing Services, Sandriver Group, Business Repair Consultants and Buyback Funders.

According to the announcement from the U.S. Attorney’s Office, Binelo joined the scheme as a small business customer who entered fraudulent computer equipment leases with Raymond in exchange for cash rebates. Eventually, Binelo was recruited as a vendor/partner with various lending institutions. Under the alleged arrangement, Raymond secured the fraudulent leases with customers, which Binelo passed off to the victim lenders. Victim lenders wired the proceeds to a bank account controlled by Binelo. Binelo allegedly took his portion of the proceeds and wired the remaining funds to Raymond.

Raymond allegedly participated in fraudulent lease deals valued at more than $20 million, while Binelo allegedly participated in fraudulent lease deals valued at more than $6 million. Binelo pled guilty to conspiracy to commit wire and mail fraud.

Easley made the announcement after U.S. District Judge Terrence W. Boyle accepted the plea. The Federal Bureau of Investigation is investigating the case and Assistant U.S. Attorney Toby Lathan is prosecuting the case.

Like this story? Begin each business day with news you need to know! Click here to register now for our FREE Daily E-News Broadcast and start YOUR day informed!

Leave a comment

View Latest Digital Edition

Terry Mulreany
Subscriptions: 800 708 9373 x130
[email protected]
Susie Angelucci
Advertising: 484.459.3016
[email protected]

View Latest Digital Edition

Visit our sister website for news, information, exclusive articles,
deal tables and more on the asset-based lending, factoring,
and restructuring industries.