Deepal Wannakuwatte, 63, of Sacramento, California, was sentenced to 20 years in prison for a long-running fraud scheme.
It was announced by United States Attorney Benjamin B. Wagner, Special Agent in Charge Monica M. Miller of the FBI’s Sacramento Field Office, Acting Special Agent in Charge Thomas McMahon for the IRS-Criminal Investigation, and Special Agent in Charge Wade V. Walters of the Federal Deposit Insurance Corporation Office of Inspector General.
In addition to the prison term, United States District Judge Troy L. Nunley ordered Wannakuwatte to forfeit multiple properties, vehicles, business interests, and bank accounts to be used to provide restitution to victims. The total value of the properties, vehicles, business interests, and bank accounts is estimated to be at least $3.5 million.
According to court documents, from 2002 to 2014, Wannakuwatte convinced nearly 200 victims, including individuals, corporate entities, and financial institutions, to invest in a number of business opportunities by misrepresenting the financial worth of himself and his companies. Wannakuwatte’s companies, IMG and Relyaid, were involved in the international manufacture, shipment, and distribution of latex gloves. He falsely claimed that these companies did tens of millions of dollars in business with federal agencies every year, most notably the Department of Veterans Affairs. In 2013, Wannakuwatte claimed to have more than $125 million in VA contracts alone. In fact, while he did have a contract with the VA, it was only worth up to $25,000 a year.
Ultimately, Wannakuwatte obtained well over $230 million from his victims. Contrary to his representations, Wannakuwatte used much of the money he obtained to pay himself and his family, make lulling payments to participants in his fraudulent investment schemes, and pay outstanding debts unrelated to his false representations. A former owner of the Sacramento Capitals professional tennis team, Wannakuwatte purchased properties in Hawaii, Oregon and California.
In order to establish his financial credibility, Wannakuwatte showed investors his personal and corporate tax returns where he actually reported and paid taxes that falsely overstated his annual personal income and the annual gross receipts and sales for IMG. He used investors’ money to pay the overstated tax returns.
“This sentence brings to an end to one of the longest running, most extensive, and most damaging fraud schemes our region has ever seen,” said U.S. Attorney Wagner. “The total losses to investor victims exceeds $100 million. The sentence imposed today is tantamount to a life sentence, although no amount of prison time will undo the harm he caused to so many victims. I want to commend the FBI and IRS-CI for detecting and swiftly stopping this scheme before it caused even greater losses.”
“Wanakuwatte’s victims-individuals, businesses, government agencies, venture funds, and financial institutions-suffered as his elaborate scheme collapsed. In his high-profile pursuit for prestige and financial gain, Wannakuwatte had no regard for public trust and the financial stability of his victims,” said Special Agent in Charge Monica M. Miller of the Sacramento Division of the Federal Bureau of Investigation. “We thank the IRS Criminal Investigation and FDIC Office of Inspector General for their partnership throughout this investigation. We are committed to aggressively pursue those who attempt to circumvent the law for personal gain.”
“This case shows that the appearance of success can mask a tangled financial web of lies,” said Acting Special Agent in Charge Thomas McMahon, IRS-Criminal Investigation. “Today’s sentencing represents the severity of the fraud committed by Wannakuwatte and those he hurt the most: the victims who fell prey to the massive fraud scheme. The victims will never be whole again from the fraud totaling more than $230 million, but rest assured they will have the comfort of knowing Wannakuwatte will be incarcerated for many years to come. This case should serve as a warning to those thinking of committing fraud.”
FDIC OIG Special Agent in Charge Wade V. Walters stated, “The sentencing of Mr. Wannakuwatte today reflects fitting punishment for a fraud scheme that victimized so many trusting individuals, businesses, government agencies, financial institutions, and others. We are pleased to have played a part in bringing Mr. Wannakuwatte to justice and value our cooperative working relationships with the U.S. Attorney’s Office, FBI, and IRS-CI.”
This case is the product of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the Federal Deposit Insurance Corporation, Office of Inspector General, Office of Investigations. Assistant United States Attorneys Michael Beckwith and Kevin Khasigian are prosecuting the case.Â
