BUFFALO, NY – The owner of a diamond business in Rochester, NY, has been accused in a fraud scheme.
Brian L. Schumacher, 55, of Penfield, NY, was charged by complaint with wire fraud and wire fraud conspiracy.
Assistant U.S. Attorney Charles M. Kruly, who is handling the case, stated that according to the complaint, between April 2016, and January 2017, the defendant conspired with others to defraud two investors out of hundreds of thousands of dollars.
The actions of Schumacher and others led investors, located in Massachusetts and California, to wire significant amounts of funding to Schumacher’s company, Integra Diamonds, to purchase diamonds in Africa, according to a press release from the U.S. Attorney’s Office for the Western District of New York.
The charges carry a maximum penalty of 20 years in prison and a fine of $250,000.
According to the release:
The Massachusetts victim (Victim 1) was contacted by a co-conspirator of the defendant, who initially indicated that an investment of $100,000.00 would yield a minimum profit of $60,000.00 in one year. Skeptical because of the generous return that was promised, Victim 1 sought assurances that he was not the initial or sole investor in Integra Diamonds. Subsequently, Victim 1 received documents that falsely suggested that Integra Diamonds had other investors, and which also falsely claimed that Integra Diamonds had agreements with a logistics vendor and U.S.-based diamond purchasers. On June 16, 2016, Victim 1 wire transferred $100,000.00 from his bank account to an account in the name of Integra Diamonds. During the course of the conspiracy, $30,000 was returned to Victim 1, but not the remaining $70,000 of his $100,000.00 investment or any of the promised return. According to the complaint, $44,000 of Victim 1’s funds were attempted to be wired to Schumacher while he was in Sierra Leone to purchase diamonds. When that wire was unsuccessful, $44,500 was returned to a co-conspirator’s personal bank account.
Victim 2, a resident of California, also invested $100,000.00 in Integra Diamonds, after receiving a promise for a significant return. On December 2, 2016, Victim 2 wire transferred $100,000.00 from his bank account to an Integra Diamonds bank account. According to the complaint, Schumacher then withdrew $90,000 in cash from Victim 2’s investment, which he spent on expenses associated with another trip to Sierra Leone to purchase diamonds. Schumacher used Victim 2’s money to purchase, among other things, 1,211.85 carats of industrial diamonds for $30,296.25. Schumacher then allegedly resold those diamonds to a U.S. diamond broker for $11,514, none of which was returned to Victim 2. Over the course of the next year, Victim 2 requested status updates and return of his funds multiple times. Schumacher allegedly provided a number of excuses for the failure of Victim 2’s investment, including that the diamond purchase was simply taking longer than expected and that the original diamond purchase fell through. Victim 2 was also informed that Schumacher was trying to secure another deal. Ultimately, Integra Diamonds did not repay Victim 2 any portion of the $100,000 loan principle, or any interest.