Four to plead guilty to investment scheme...

Four to plead guilty

to investment scheme

Four more people, including a Costa Mesa and a Newport Beach

resident, were charged Friday and agreed to plead guilty in

connection with an investment scheme that scammed some 600 people of

more than $45 million.

Including the latest charges, seven employees of Newport

Beach-based DFJ Italia have been connected by the U.S. Department of

Justice to a so-called Ponzi scheme, Assistant U.S. Atty. Michael C.

Zweiback said. DFJ Italia promised investors high returns and falsely

claimed to be linked to an Italian royal family, Zweiback said.

The scheme started in 1996 and ran through the company’s collapse

in 2000, the justice department reported.

Investors ran the gamut from the very successful to those who

entrusted the company with their retirement money, Zweiback said.

“The loss literally meant these people were destitute,” he said.

Timothy G. Manno, a 36-year-old Newport Beach resident who was a

salesman for DFJ Italia, was charged Friday with conspiracy to commit

mail fraud and tax evasion. John Loy, a 42-year-old Costa Mesa

resident and chief financial officer for the company, is accused of

failing to supply information to the Internal Revenue Service by

understating his 1998 income.

Another chief financial officer, 40-year-old John Reardon of

Commack, N.Y., was charged with one count of failure to file a tax

return and allegedly failing to report $89,000 he earned at the

company.

Temecula resident and DFJ vice president Kenneth Kuczwaj, 46, was

charged with tax evasion, lying to Securities and Exchange Commission

investigators and conspiracy to commit mail and wire fraud. Kuczwaj

was also known as “Capo di Asta,” or chief of staff, Zweiback said.

The company used titles commonly associated with Italian organized

crime families, including “Don” for the chief executive officer,

Zweiback said.

“I think that was the perception they tried to instill,” he said.

The four are expected to enter guilty pleas in federal court in

the next two weeks, Zweiback said.

Former DFJ Italia accountant and Corona del Mar resident Richard

Glenn Dunham, 57, pleaded guilty in April to mail fraud and tax

charges. He is scheduled for sentencing in June.

DFJ salesman Guy Scarpelli, a 44-year-old Neptune, N.J., resident

pleaded guilty in October to charges of conspiracy to commit fraud,

tax evasion and structuring cash transactions to avoid reporting

requirements.

-- Marisa O’Neil