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Owner of Sacramento firms accused of fraud
Question of the Day
SACRAMENTO, Calif. (AP) - The owner of two Northern California medical-supply businesses was arrested on charges that he ran a $100 million-dollar-plus Ponzi scheme to keep his firms afloat.
Deepal Wannakuwatte took in more than $125 million over the past decade from investors who were financing contracts to supply gloves to the U.S. Department of Veterans Affairs, according to an FBI affidavit reported by The Sacramento Bee (http://bit.ly/1cHlclA ) on Sunday.
Wannakuwatte, 63, told investors that his company, International Manufacturing Group Inc., had VA contracts totaling $100 million a year, but actual sales came to just $25,000 a year, according to the affidavit. It alleges that Wannakuwatte was running a Ponzi scheme, paying investors not with profits from his glove contracts but with money provided by other investors.
He was arrested last week and appeared before U.S. Magistrate Judge Carolyn Delaney in Sacramento on Friday. A call to his attorney, Donald Heller, on Monday was not immediately returned.
International Manufacturing and Wannakuwatte’s other West Sacramento company, RelyAid Global Healthcare Inc., were sued by business lender General Electric Capital Corp. last August after allegedly defaulting on a $4.6 million debt related to a latex glove factory RelyAid planned to build in Yuba County, according to the Bee.
The lawsuit is pending in federal court in Sacramento, and a judge ordered Wannakuwatte on Wednesday to give GE a $3 million private King Air plane that had been pledged as collateral, the Bee reported.
Information from: The Sacramento Bee, http://www.sacbee.com
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