Former CFO admits to role in fraud financials
By SAM GARCIA
9/5/2002

Two additional defendants have plead guilty in one of the largest fraud cases in Southern California history.

The U.S. Attorney's office recently announced that the former Chief Financial Officer of PinnFund admitted to being a coconspirator in the $300+ million Ponzi scheme. In his admission, John D. Garitta, 43, acknowledged preparing and disseminating false financial statements. Garitta also admitted to participating in a scheme to deceive auditors.

"This case is another example where personal greed led to the evasion of taxes and the failure of a corporation," said Denise L. Rubin, Internal Revenue Service (IRS) Criminal Investigation Special Agent. "The heightened awareness of corporate fraud in America has made the public more aware of the financial ruin caused by these types of crimes."

Michael Fanghella, PinnFund's former chief executive officer who was the primary conspirator in the case, pled guilty to one count of conspiracy to commit wire fraud, one count of conspiracy to commit money laundering, three counts of tax evasion, and once count of filing a false entry with HUD earlier this year. Fanghella is awaiting sentencing in November.

John C. Bykowski, 25, also plead guilty according to the announcement. Bykowski, who was an administrative assistant at the company, admitted participating in the conspiracy by making cash withdrawals from PinnFund for the benefits of the conspirators with the intent of hiding the cash from the IRS.

"This serious crime reveals how devastating a major fraud can be to all parties involved," said FBI Special Agent William D. Gore. "The investors lost hundreds of millions, while the innocent employees lost their jobs and retirement funds."

Article © MortgageDaily.com All Rights Reserved