ies Sega oe NED __COPY Case 1:08-cr-00204,Y Document 1-3 Filed 07/29/2008 Page 1 of 5 YmLED = _LOD@ED —__ RECEI 2 Bue Noy = 5 2001 : OLERKU 8 DISTRICT COURT ier ‘Avene, Suit 1200 bert IF ARIZONA 4) Boots 2 004 BY. DEPUTY, 5 iphone aa) S750 6 1 8 9 ‘UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA ae wo. cro [o/o-HHE™ oe » INEQRMATION VIO: 18U,SC. § 1341 12), John J. Madsen, (Mail Fraud) 16 caine stan "ORNEY CHARGES: | | 18 COUNT 1 19 ‘Atall times material to this Information: 20 i. Defendant JOHN I, MADSEN cid business as The Madsen Group, Ltd. (ING). a 2, MADSEN maintained addresses for TMG at 6560 N. Scottsdale Road, Suite 22 1.200, Scottsdale, AZ, 85253, and 8812N, 65* Stroct, Paradise Valley, Arizona 85253. 23 3, TMG was atall times relevant hereto, an Arizona corporation doing business in 24) Avizona and elsewhere, TMG was owned, operated and controlled by MADSEN, ‘MADSEN 25 | incorporated TMG during July 1995. 26 4 Glenn R. Premru did business as Atlantic and Pacific Investment Corporation, Inc. 27| (APIC), and Atlantic and Pasific Capital Corporation (APC). 2a) genes Tues wteges (2 7 oDcS eo 2 ae AY 10 uw 12 13 14 15 16 17 18 19 20 a 2 23 24 28 26 28 | Case 1:08-cr-00204-LY Document 1-3 Filed 07/29/2008 Page 2 of 5 5, Premru maintained addresses for APIC at 1 Shoreline Plaza, 800 North Shoreline Boulevard, South Tower, Suite 1020, Corpus Christi, Texas 78401, and 8777 North Gainey Center Drive, Suite 220, Scottsdale, Arizona 85258, APIC was a all times relevant hereto, a Texas corporation doing business in Texas, Arizona and elsewhore, APIC was owed, operated and controlled by Premru. 6. Premmu maintained an address for APCC at 8777 North Gainey Center Drive, Suite 200, Scottsdale, Arizona 85258. APCC was a allies relevant hereto, an Arizona corporation doing busines in Arizona and elsewhere, APCC was owmed, operated and controlled by Prem, 7, From on or about mid-1994 through mid-1998, MADSEN and Premru were engaged in an ongoing business relationship in Teas, Arizona and elsowhere, relative to hss companies APIC, [APC and’ TMG. APIC and APCC were operated by Premru as purported loan companies capable of funding cliont loans in excess of one million dollar. APIC and APCC successfully solicited ‘business during this seme time period from clients whose companies were based in the US and Barope. MADSEN acted as a loa broker or agent, and refered to APIC and APCC numerous clients seeking multi-million dollar loans, MADSEN initially acted in this capacity as an individual Joen broker o agent, and later vs-Avis his business, TMG. MADSEN and Prem represented to "APIC and APCC olionts that both entities wore loan companies capable of funding client loans in excess of one million dollars. MADSEN end Promra further represented to ther clients, falsely, that [APIC and APCC bad successfully funded prior cient loans, Prema required en advance loan commitment fee from all APIC and APCC clients before initiating and/or proceeding with the purported loan process. This feo usually totaled 1% ofthe loan araomt being requested, MADSEN and Prennru eplit this fee betwoon themselves. APIC end APCC never funded any client loans, MADSEN Imew that Premm never intended to fond any APIC and APCC client loans. 8, MADSEN end Premma represented to APIC and APC clients that both loan companies would act asthe Sprincipal lender” or “principal funds provider". Premru provided prospective olisuts with list of one hundred banks thet Premru identified as “World Money Center Banks” MADSEN and Prem reprosentod to APIC and APCC clients faat both companies were 2Case 1:08-cr-00204-LY Document 1-3 Filed 07/29/2008 Page 3 of 5 1 | capable of funding multi-million dolar loans, via their purported “upstream comespondent World 2 | Money Centr Banks, The APIC and APCC lon documentation cotsnedJnguape ttn hat 3 cient oma commitment ees woold not be refinded ifthe cit “filed to perform," inning filing 4 || to provide “acceptable ‘bank instruments as collateral.” 5 9, From on or about mid-1996 through mid-1998, MADSEN also acted, via his company 6 | TMG, as a purported “collateral provider” for APCC clients who were seeking “acceptable” 7| collateral in the form of letters of credit, bank guarantees and bank debentures, in order to receive a {toa fom APCC. MADSEN dd so with Prom's nowlsdge an consent, Prem also soered to 9], MADSEN and TMG numerous APCC clients seeking collateral for ‘their APCC loan requests. 10 MADSEN represented to his clients that TMG had established « working relationship with large and 11 |] well-known banks that were capable of providing collateral to TMG clients sooking loans from 12] APCC, even though he Imew that none of those banks ‘ever would in fact provide collateral, and that 13] APCC or APIC would never fund a loa . MADSEN charged all of these clients a “collateral 14 | provider fe” for bis purported services, MADSEN and Prem spit tis fee between thanseives 15 || and usually in half. MADSEN and IMG never provided collatoral of any kind to a single TMG 16 | elem, MADSEN als never intended to provide collateral to any TMG clients Instead, MADSEN's 17| and Premra’s agreed objective was to generate additional collateral provider foes from these 18} applicants, which they would then spit. to] 30. MADSEN and Premrureeived and shared betwown themselves approximately 7.7 20} million dollars in fees froma APIC, APCC and TMG clients during their ‘operation of all three 21 companies, 7 22 11. MADSEN did not sclose to any of his clients that APIC and APCC were incapable of 3 fanding the multi-million dollar oan requests that his clients were seeking, MADSEN alse did not 24 | disclose to his cligots thet TMG would never provide collateral from any banks or similar financial 25 | institutions. MADSEN further failed to disclose to his clients that APIC and APCC had never 16 | fade a single cient loan, sud thet Peru didnot intend to fund any cleat oms, MADSEN did 27) no islet his client that TMG had novercbsind collateral fom e ban or sini financial 2B 3{ woe 10 n 12 13 4 45 16 uw 18 9 20 2 2 2B 2s wb 21 28 Case 1:08-cr-00204-LY Document 1-3 Filed 07/29/2008 Page 4 of 5 institution, and that he knew he would never secure collateral for any of his ‘TMG clients. MADSEN ‘would regularly, vie either verbal statements or writen correspondence, attempt to pacify or ll his clients into belioving TMG was about to secure collateral with a bank. At Premru’s direction, ‘MADSEN would also regularly falsely reassure TMG clients that: ‘their loans with APCC would soon close, when, in fact, he knew no such loans were fortheoming, ‘THE SCHEME TO DEFRAUD 12, Beginning on or about mid-1994, and through on or about mid-1998, in the District of ‘Arizona and elsewhere, JOHN J. MADSEN, d/b/a TMG, helped devise and participate in, along with Glen R. Promru, d/b/a/ APIC and APCC, a scheme to defraud in which MADSEN would obtain ‘money in the form of fees from TMG, ‘APIC md APCC clients who were seeking fonding for multi- million dollar loans, by referring clients to APIC and APCC, and by falsely representing to these ction that; 1) APIC and APCC were capable of funding mult-xillion dollar loans; 2) APIC and “APCC had muocessfilly faded prior client multi-million dollar loens; 3) TMG was & “collateral provider” capable of providing | “acceptable” collateral. from banka for APCC clients; and 4) TMG hod successfully secured collateral for priot TMG clients. 13. Onor ebout Jamary 31, 1997, in the District of Arizona and elsewhere, JOHNJ. MADSEN, having helped devise and intended to devise the aforesaid scheme to defraud and obtain money exd property of others by means of false representation, for the purnose of executing and. attempting to execute the scheme, did. Jmowingly cause to be delivered by the ‘United States Postal Service according to the direction thereaa, a cover letter and notarized loan, ‘oxtension letter, both dated January 30, 1997 from Glenn R, Prema, Chairman ofthe Board, Atlantic and Pacific Capital Corporation, Scottsdale, Arizona, and. addressed to James Childers, President, Regency’ ‘Managemest Company, Marion, North Carolina. ‘Allin violation of Title 18, United States Code, Section 134125 26 27 28 Case 1:08-cr-00204-LY Document 1-3 Filed 07/29/2008 Page 5 of 5 Dated this 15* day of October, 2001. PAULK. CHARLTON United States Attorney District of Arizona ‘TUCHI stant United States Attorney