ALEXANDRIA, Va. - A federal grand jury has indicted the two principals of a Virginia company, charging them with running a $134 million scheme to market visas to unsuspecting foreign investors seeking to immigrate to the United States.
In an 80-page indictment made public yesterday, the grand jury charged James F. O'Connor and James A. Geisler of the Interbank Group with conspiracy, immigration and visa fraud, conspiracy to commit money laundering, money laundering, income tax violations and bankruptcy fraud.
O'Connor, 43, and Geisler, 47, both Virginia residents, were released on their own recognizance after an appearance yesterday before a U.S. magistrate. They were ordered to turn in their passports and are scheduled to be formally arraigned Aug. 21.
Neither man could be reached yesterday for comment, but both previously have denied wrongdoing.
Through Interbank and a series of related companies, the indictment charges, Geisler and O'Connor filed about 320 false visa applications with the U.S. Immigration and Naturalization Service in 1997 and 1998.
In addition, federal prosecutors said, the two engineered a scheme to launder money through bank accounts in the Bahamas.
O'Connor and Geisler were involved in the investor visa program, which was created by Congress in 1990 to create jobs and spark foreign investment.
Under the law, as The Sun reported in February, foreign residents can qualify for permanent U.S. residence by investing $1 million in an American business. The investment must create at least 10 jobs. In areas of high unemployment, a $500,000 investment qualifies.
According to the indictment, O'Connor and Geisler told the foreign investors they could qualify for the program by investing $100,000 or $150,000. The investors were told that bank loans could make up the difference.
To make it appear to U.S. immigration officials that the proper amounts were invested, the indictment charges, the money was wired to foreign bank accounts and then wired back to the United States in the name of the investors.
In fact, prosecutors charged, no loans were ever made.
"All told, Geisler and O'Connor transferred more than $134 million back and forth through the Bahamas to create fraudulent account statements for their clients," said Helen F. Fahey, U.S. attorney for the Eastern District of Virginia.
She said little if any money was invested in American businesses and nearly all of Interbank's clients ultimately lost what they invested. Instead of investing the money as required by law, Fahey said, O'Connor and Geisler used the money for other purposes.
The indictment charges that O'Connor and Geisler, while conspiring to defraud the INS and the Internal Revenue Service, reneged on their promise to investors to keep their money in an escrow account and "used the money for themselves or to pay the expenses of Interbank."
According to the indictment, dozens of checks from Interbank and related companies were issued to O'Connor and Geisler or members of their immediate families.
Some of the money was placed in their personal bank accounts, while other sums were used to cover such items as credit card bills and legal fees.
If convicted on all the charges, the defendants would each face prison sentences of more than 30 years and fines in excess of $10 million. They also would have to forfeit $17.8 million in assets.
Privately, however, federal officials concede that they simply don't know what happened to the investors' money.
Mario Carbini, of Santa Barbara, Calif., an Interbank investor, said he was pleased with the indictment, but he still faces likely deportation and might never recover the $150,000 he invested.
"I'm very pleased in a way, but my story doesn't change much," Carbini said. "It doesn't look like I'll ever get anything back, and I'm still expecting them to deny my visa. It's so bleak."
Other investors in Interbank and other programs also face having their visas revoked and being forced to leave the country. Investors in a Maryland-based firm called AIS have filed suit in federal court in California seeking to block INS deportation orders.
Kenneth Rinzler, a Washington, D.C., attorney who has filed several civil suits against Interbank and its officers, said he was "delighted" by the indictment.
"Frankly, I'm amazed. It's good to see something happen after so many people have been defrauded," said Rinzler, who said his clients have yet to recover a cent despite winning judgments against both Interbank and O'Connor.
David A. Hirsch, a Virginia attorney, said he also is continuing to pursue a civil suit against O'Connor, Geisler and Interbank.
The indictment follows more than two years of investigation by the INS, the IRS, the State Department and the U.S. attorney's office in Alexandria and the filing of dozens of civil suits, including Carbini's, against Interbank in courts across the country.