$5.5 Million in Investor Funds Allegedly Stolen
SAN FRANCISCO - On May 24, 2016, a federal grand jury in San Francisco indicted both Jaswant Singh Gill, also known as Jason Gill, the Chief Executive Officer of JSG Capital Investments LLC in San Diego (“JSG Capital”), and Javier Carlos Rios, the Strategic Relationship Manager at JSG Capital, with one count of conspiracy to commit wire fraud and one count of wire fraud, announced United States Attorney Brian Stretch and Federal Bureau of Investigation Special Agent in Charge John F. Bennett.
According to the indictment, Gill, 48, of San Diego, Calif., and Rios, 33, of National City, Calif., are alleged to have made false and misleading representations and promises to investors in JSG Capital, including, but not limited to, promises to purchase so-called pre-IPO shares of private companies like Uber Technologies and Airbnb using investor funds. In fact, Gill and Rios are alleged to have fraudulently diverted and stolen investor funds for their own personal use and benefit by, among other things, converting investor funds into cash, transferring investor funds to their own personal bank accounts, and using investor funds for personal expenses like rent, restaurants, nightclubs, hotels, and retail shopping. Gill and Rios allegedly concealed their fraud by paying earlier investors “interest” payments or so-called lulling payments using more recent investor funds in a manner that was consistent with a classic Ponzi scheme. In this manner, Gill and Rios raised in excess of $9.3 million in investor funds and are alleged to have fraudulently diverted and stolen in excess of $5.5 million.
Gill was arrested on May 27, 2016 by the FBI in Nashville, Tennessee, and will make his initial appearance today in federal court in the Middle District of Tennessee. Rios was arrested on May 25, 2016 by the FBI in San Diego, Calif., and will also make his initial appearance today in federal court in the Southern District of California. The United States Attorney’s Office anticipates that both cases will be moved to San Francisco for an appearance in federal court in Northern District of California on a date that remains to be scheduled. The case has been assigned to the Honorable William H. Orrick, U.S. District Court Judge.
An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. This indictment charged both defendants with one count of conspiracy to commit wire fraud, in violation of 18 U.S.C. § 1349, and one count of wire fraud, in violation of 18 U.S.C. § 1343. If convicted, the defendants face, on each count, a maximum sentence of twenty years in prison; a fine of $250,000 (or twice the gain or loss, whichever is greater); asset forfeiture and restitution, if appropriate, in amounts to be determined by the court; and other penalties. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Assistant U.S. Attorney Adam A. Reeves is prosecuting the case with the assistance of Paralegal Specialist Daniel Charlier-Smith and Legal Assistant Bridget Kilkenny. The prosecution is the result of an investigation by the FBI. The San Francisco Regional Office of the United States Securities and Exchange Commission provided assistance during the investigation.