Pinay 'Bernie Madoff' gets two years in jail for US wire fraud

Razel Canedo, the so-called Bernie Madoff of the Filipino-American community, was sentenced to two years in federal prison and three-years of supervised release for bilking unsuspecting victims out of their life savings.

 

Canedo, 44, entered a plea bargain to avoid longer prison term and pled guilty to one count of conspiracy to commit wire fraud.

 

Judge Loretta Preska of the U.S. District Court for the Southern District of New York also ordered Canedo to pay $949,200 in restitution to her victims.

 

She has 60 days to turn herself in at the Federal Correctional Institution in Danbury, Connecticut, a low-security prison for female inmates.

 

Canedo apologized in court and vowed to better her life, but many of her victims said Canedo deserves a harsher penalty for taking their hard-earned money.

 

According to the U.S. Attorney’s Office, Canedo, also known as Razel Torres and Razel Agravante, made her victims believe that they were funding companies to help secure jobs for Filipinos nurses and nannies.

 

Canedo sold her clients on the idea that they were helping to pay for training, immigration expenses and placement services for Filipino workers and create a better life for themselves and their families.

 

Between January 2003 and July 2008, Canedo used a Ponzi scheme by falsely telling her victims they were investing in Lady of Lourdes Home Care & Medical Staffing Inc. and K&K Nannies & More Inc.

 

A Ponzi scheme is a fraudulent scheme that promises to pay high returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation.

 

"Instead of investing the funds as promised, Canedo transferred the bulk of the victims' money to overseas bank accounts or deposited it into bank accounts she controlled and then withdrew it as cash," the indictment against Canedo said.

 

Canedo lured her victims with promises of three percent monthly—and up to 50 percent yearly—returns on their investments, prosecutors said.

 

Some investors' received payouts to sustain the deception, but in most cases, when Canedo actually gave her clients checks, they would bounce, according to the indictment.

 

"When questioned by those investors, Canedo assured them that they would be paid, gave them various excuses for why the checks had bounced, and sometimes instructed them to cash the checks at a later date," prosecutors said.

 

U.S. Postal Inspector Greg Ghiozzi said once investors began to suspect they've been had by Canedo, the defendant would go into hiding.

 

"They couldn't find her. They would call her, wait outside her residence. She fell off the face of the earth," said Ghiozzi.

 

"We do know she was building a giant house in the Philippines. Some money was going to her relatives. One thing we are sure of is it didn't go to bring nurses over to the U.S.," said Ghiozzi.

 

"Razel Canedo preyed on members of the Filipino-American community who invested their hard-earned money into what they later learned was merely Canedo's bank accounts," U.S. Attorney Preet Bharara said.

 

"Ponzi schemes often targeted religious or ethnic groups."

 

Canedo was arrested in Atlantic City, N.J. on Feb. 1, 2010, and charged with mail and wire fraud.

 

She originally faced a maximum penalty of 40 years in jail, according to prosecutors. — Filipino Reporter