ALEXANDRIA, Va. - A federal judge found two men guilty yesterday of all charges in a multimillion-dollar visa fraud scheme that duped hundreds of unwitting foreign investors seeking a permanent home in the United States.
In a 49-page ruling issued late in the day, U.S. District Judge T.S. Ellis III found James A. Geisler, 48, and James F. O'Connor, 44, guilty of all charges in an indictment issued just over a year ago.
The two Virginia residents were convicted of visa fraud, conspiracy to commit visa and wire fraud, money laundering and filing false income tax returns. Geisler was also found guilty of bankruptcy fraud.
The decision, issued after several delays, came in a brief session. O'Connor and Geisler, who were accompanied by their families and a contingent of supporters, expressed no reaction to the verdict and left the courtroom without comment.
They will remain free on bail pending sentencing, scheduled Nov. 2.
Several former clients of the two men also sat silently in the courtroom with their attorneys. Many have pending civil claims against O'Connor and Geisler. As Ellis noted in his ruling, few of the investors ever got the promised visas. Many now face deportation.
In his decision, which has been awaited for several months, Ellis concluded that O'Connor and Geisler, through their now-defunct company, the Interbank Group, filed hundreds of fraudulent visa applications with the U.S. Immigration and Naturalization Services.
To make the applications appear legitimate, Ellis wrote, the two defendants "jointly devised and engaged in a complex scheme to defraud the INS." That scheme included the shuttling and recycling of millions of dollars between the United States and offshore bank accounts.
Interbank, based in Herndon, was set up specifically to market a little-known program under which foreigners can qualify for permanent U.S. residency by investing at least $500,000 in an American business. Under the 1990 law, the investment must create 10 new jobs.
Based on evidence presented by Assistant U.S. Attorney Robert A. Spencer, Ellis said O'Connor and Geisler told investors they could qualify for the program by putting up as little as $100,000. The balance was made up by "sham loans" generated through Bahamian bank accounts.
Ellis concluded the loans were phony and, even if they were legitimate, should have been disclosed to the INS, which they were not.
"In fact," Ellis wrote, "not a single alien invested the requisite $500,000 in a new commercial enterprise." Instead, he wrote, the same funds were "used again and again to effect similar sham loan transactions."
In addition, he said, evidence showed that many of the alleged loan documents were not even signed. Investors' signatures were forged on dozens of forms submitted to the INS.
"Both O'Connor and Geisler knew the applications submitted on behalf of aliens contained false and materially misleading information," Ellis concluded.
The judge also found that Geisler and O'Connor lied to the aliens by telling them that their investments would be kept in separate escrow accounts until the INS issued the promised visas.
Noting that Interbank collected about $21 million from the nearly 300 investors who signed up, Ellis found that the money that was supposed to be held in escrow was used instead to fund the phony loans, to finance operations and to pay personal expenses of O'Connor and Geisler.
Citing court testimony, Ellis said that not one of the investments created the 10 jobs required under the law. In fact, he said, only two people - one of them Geisler's brother - were employed at two of the business locations listed in the visa applications.
Citing testimony of an IRS agent and two Interbank accountants, Ellis concluded that both defendants filed false tax returns and attempted to disguise hundreds of thousands of dollars in income by recording the payments as loans.
The investor visa program, which Ellis noted was the basis for Interbank's existence, has been marked by controversy and triggered an investigation by the inspector general of the U.S. Justice Department into allegations that another investor visa firm, American Immigration Services of Maryland, had received preferential treatment.
Only portions of that inspector general's report have been made public, despite a federal lawsuit seeking to force its disclosure. No charges were brought as a result of the probe.
The charges against Geisler and O'Connor were first made public Aug. 11, 2000, in an 80-page, 61-count grand jury indictment. That came after an investigation lasting more than two years, highlighted by a 1998 INS raid on Interbank's corporate headquarters. The raid was led by INS investigator Elizabeth Goyer, later a key prosecution witness.