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Temecula businessman acquitted in nultimillion-dollar fraud trial

 

Last updated 6/29/2018 at 1:56pm



TEMECULA - A Temecula businessman was acquitted Thursday, June 28, of nearly two dozen felony charges stemming from what prosecutors contended was a money laundering scheme that involved obtaining hundreds of thousands of dollars in loans for medical equipment that was never acquired.

After deliberating Wednesday and briefly again Thursday morning, a Riverside jury found 53-year-old Sammy Ciling not guilty of 17 counts of money laundering and six counts of grand theft, as well as sentence-enhancing white collar crime allegations.

Ciling's co-defendant, 52-year-old Dr. Donald Woo Lee of Newport Beach, is slated to be tried separately in October and is free on a $150,000 bond.

Riverside County Superior Court Judge Charles Koosed closed the case against Ciling and ordered the District Attorney's Office to release the freeze on his assets after the verdicts were returned.

In court papers filed by Deputy District Attorney Janet Hasegawa, the government argued that Ciling actively conspired with Lee to fraudulently obtain loans in excess of $3 million in 2009 and 2010. The defense countered that Ciling was doing his job and did not conspire to commit any type of fraud.

Ciling and Lee were co-proprietors of Temecula Diagnostics on Enterprise Circle.

The prosecution alleged that Ciling handled financing intricacies, while Lee put his signature to whatever documents needed to be signed to authenticate transactions related to medical equipment.

Wells Fargo Bank and Zions Credit Corp. were the loan issuers, and they initiated civil proceedings against Lee when they didn't receive monthly payments to cover their loans to the M.D., culminating in the criminal probe and the filing of a complaint in December 2014.

The alleged scheme started with $1.4 million in loans procured from Wells Fargo in December 2009 and January 2010. According to Hasegawa, the funds were provided on the belief that they would be used to purchase new magnetic resonance imaging units, or MRIs, for a full-scale imaging center that Lee proposed to operate in association with Prime Partners Medical Group Inc.

The prosecution alleged in court documents that Ciling arranged to purchase the MRI units from S & A Operations, run by Alan F. Rizzone, who primarily specialized in repairing tractors and trailers. According to the D.A.'s office, Ciling owed Rizzone $30,000 and allegedly persuaded him to create invoices validating sales of the MRI machines. Lee allegedly went along with the process.

Hasegawa said Wells Fargo deposited the funds for the machines into a bank account under Rizzone's control, and he retained $30,000, then allegedly disbursed the balance -- $1.37 million -- to Ciling.

According to the prosecution, Zions Credit Corp. was contacted a few months later by Lee, who indicated that he intended to purchase additional imaging units from Extreme Green Medical Corp. in New Mexico. The company was run by Robert J. Montoya, who had partnered with Ciling on past ventures.

Hasegawa alleged that, under Ciling's direction, Montoya submitted paperwork purporting to show Extreme Green's intent to sell equipment to Lee for his practice.

Loans valued over $1.5 million were ultimately approved, and according to the prosecution, the funds soon after landed in an account managed by

Ciling, who allegedly did not use them for the stated purposes.

Montoya and Rizzone pleaded guilty three years ago to misdemeanor charges of filing false statements on financial affidavits and were each sentenced to probation.

 

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