Kerry Michael Deevy has pleaded guilty to 13 counts of an indictment pending against him, including one count of conspiracy to commit mail and wire fraud, three counts of mail fraud, and nine counts of wire fraud, the Justice Department and the U.S. Postal Inspection Service said.
The plea was in U.S. District Court for the Southern District of Florida in Miami.
The case involves the long-running business opportunity frauds, based in Costa Rica, that preyed on frequently elderly U.S. citizens.
Deevy, a Canadian citizen, was arrested in Costa Rica in February 2012 following his indictment by a federal grand jury in Miami on Nov. 29, 2011. Following his arrest in Costa Rica, Deevy was extradited to the United States for prosecution. Deevy was arrested based on charges that he and his co-conspirators purported to sell vending machine and greeting card business opportunities, including assistance in establishing, maintaining and operating such businesses. The indictment is part of the government’s continued nationwide crackdown on business opportunity fraud.
In addition to Deevy, 11 other individuals have been charged in connection with business opportunity fraud ventures based in Costa Rica. Deevy is the ninth of those individuals to be convicted in the United States.
Beginning in 2006, Deevy and his coconspirators fraudulently induced purchasers in the United States to buy business opportunities in Cards-R-Us Inc., Premier Cards Inc. and Nation West Distribution Co.. said the Justice Department. The business opportunities cost thousands of dollars each, and most purchasers paid at least $10,000, the agency added.
Other scams were named USA Beverages Inc. and Twin Peaks Gourmet Coffee, Inc., according to previous news stories. They were operated out of Escazú and Sabana Sur.
Deevy participated in a conspiracy that used various means to make it appear to potential purchasers that the businesses were located entirely in the United States. In reality, Deevy operated out of Costa Rica to fraudulently induce potential purchasers in the United States to buy the purported business opportunities.
USA Beverages was registered as a Florida and New Mexico corporation and rented office space in Las Cruces, New Mexico. Twin Peaks was registered as a Florida and Colorado corporation and rented office space in Fort Collins, Colorado, and Cards-R-Us was registered as a Nevada corporation and rented office space in Reno, Nevada. Premier Cards was registered as a Colorado and Pennsylvania corporation and rented office space in Philadelphia, and The Coffee Man was registered as a Colorado corporation and rented office space in Denver. Nation West was registered as a Colorado corporation and also rented office space in Denver.
A.M. Costa Rica confirmed that the Fort Collins, Colorado, location was just a mail drop.
The justice department said that the companies made numerous false statements to potential purchasers of the business opportunities, including that purchasers would likely earn substantial profits; that prior purchasers of the business opportunities were earning substantial profits; that purchasers would sell a guaranteed minimum amount of merchandise, such as greeting cards; and that the business opportunity worked with locators familiar with the potential purchaser’s area who would secure or had already secured high-traffic locations for the potential purchaser’s merchandise stands.