NEWSRELEASE

For Immediate Distribution

November 7, 2007

Thomas P. O’BrienUnited States Attorney

Central District of California

Thom Mrozek, Public Affairs Officer(213) 894-6947

thom.mrozek@usdoj.gov

www.usdoj.gov/usao/cac

TWENTY-THREE CHARGED IN LEASING FRAUD SCHEME THAT

CAUSED MORE THAN $20 MILLION IN LOSSES TO LENDERS

SANTA ANA, Calif . – Federal prosecutors today charged nearly tw o dozen

defendants for their roles in a fraud scheme that allegedly caused more than $20

million in losses to several lending inst itut ions that believed they w ere f inancing

equipment leases.

The charges are a result of an FBI invest igat ion dubbed Operat ion Lease

Fleece, w hich targeted individuals in the equipment-leasing industry, including loan

brokers, equipment vendors and an employee of Cit iCapital.

Some of the defendants – through companies called Capitalw erks in Santa

Ana, Brickbanc Capital in Costa Mesa and others – marketed cash loans to small

businesses experiencing credit problems. Once small businesses agreed to apply for

loans, some of the defendants instead submitted equipment-lease applicat ions to

lenders. The equipment-lease applicat ions, w hich w ere inf lated so that the

defendants could obtain lucrat ive “ commissions” for themselves, w ere submitted

along w ith false invoices that purported to document the sale of computer

equipment to the small businesses. The defendants submitted the fraudulent

equipment-lease applicat ions because the qualifying criteria w ere less stringent than

for a cash loan. After the lending inst itut ions approved f inancing for the equipment

leases, the proceeds w ere not used to purchase equipment as promised to the

lenders. Instead, the money w as used to make improper cash loans to the small

businesses and to pay lucrat ive commissions to employees at Capitalw erks,

Brickbanc and the other companies. Hundreds of bogus equipment-lease packages

w ith fake invoices w ere presented to f inancial inst itut ions.

The FBI w as assisted in their invest igat ion by Cit icapital, the leasing division

of Cit ibank, w hich suffered an est imated $9.5 million in losses and discovered that

one of their employees had perpetuated the fraud. Other vict im-inst itut ions include

Wells Fargo Bank, GE Capital, American Enterprise Leasing, Key Bank, Bank of

America and U.S. Bank. Investigators est imate that the vict ims suffered at least

$20 million in losses.

The charges f iled today include mail f raud, w ire fraud and obstruct ion of

just ice.

The 23 defendants charged today w ill be summoned to make court

appearances over the next several months.

The defendants charged today are:

! Adam Zuckerman, 37, of Laguna Beach, w ho w orked at Brickbanc;

! Kirk McMahan, 31, of New port Beach, w ho w orked at Brickbanc;

! Paul Arnold, 56, of Laguna Hills, w ho w orked at Brickbanc;

! Geoff Silver, 35, of Calabasas, w ho w orked at Silver Industries;

! Brian Sime, 29, of Irvine, w ho w orked at Brickbanc;

! John J. Callaghan, 38, of Warminster, Pennsylvania, w ho w orked at

Cit icapital;

! James T. Raeder II, 42, of Mission Viejo, w ho w orked at

Capitalw erks/Preferred Lease;

! Mark McQuitty, 46, of Trabuco Canyon, w ho w orked at

Capitalw erks/Preferred Lease;

! Richard Norris, 60, of Los Angeles, w ho w orked at Capitalw erks/Preferred

Lease;

! Leo Najera, 28, of Mission Viejo, w ho w orked at ECCI;

! John Budge, 38, of Sartell, Minnesota, w ho w orked at Bach Business Credit;

! Anthony E. Watson, 61, of San Clemente, w ho w orked at

Capitalw erks/Preferred Lease;

! Leigh Dorand, 42, of Phoenix, w ho w orked at Tech Capital;

! Douglas Cox, 37, of Rancho Santa Margarita, w ho w orked at

Capitalw erks/Preferred Lease;

! James Breedlove, 51, of New port Beach, w ho w orked at Santa Fe

Equipment;

! Mark Castleman, 47, of Chino Hills, w ho w orked at Industrial Information

Systems;

! Les Spitzer, 60, of Grenada Hills, w ho w orked at Pyramid Inf inite;

! George Simon, 38, of Redondo Beach, w ho w orked at Advantage IT

Solut ions;

! Jeff Greenough, 48, of Laguna Beach, w ho w orked at Peniche;

! Troy Worrell, 47, of New port Beach, w ho w orked at Peniche;

! Lourey McComber, 53, of Prescott Valley, Arizona, w ho w orked at Peniche;

! Harold Gold, 75, of Falmouth, Massachusetts, w ho w orked at Leasing

Services; and

! Nohad Mousa, 40, of Anaheim, w ho w orked at Saut Wa Soora, Inc.

The charges f iled today are part of an ongoing investigation by the Federal

Bureau of Investigat ion.

CONTACT: Assistant United States Attorney Jennifer Waier

(714) 338-3550

Release No. 07-141