May 29, 2018 / 9:20 PM / in 25 days

Mexican businessman gets more than six years prison in U.S. fraud case

NEW YORK (Reuters) - A former partner and part-owner of Mexico’s InvestaBank SA was sentenced to six years and three months in prison on Tuesday after he pleaded guilty to a U.S. charge that he and others fraudulently obtained $21 million in tax refunds from the Mexican government.

Carlos Djemal Nehmad, 57, was sentenced by U.S. District Judge Alvin Hellerstein in Manhattan, federal prosecutors announced. Under a plea deal reached with prosecutors last year, he cannot appeal the sentence.

“I was extremely disappointed in the length of the sentence,” said Ronald Fischetti, Djemal’s lawyer. “He lived a law abiding life up to this one mistake. No one in the United States lost any money whatsoever.”

Djemal pleaded guilty to wire fraud in September. Under his plea agreement, the prosecutors agreed to drop related money-laundering charges. Djemal also agreed to a $21 million money judgment.

Djemal had been arrested in November 2016 along with three others accused of taking part in the scheme, Daniel Blitzer, Roberto Moreno and Max Fraenkel. They also pleaded guilty. Blizter and Moreno were each sentenced to six months while Fraenkel was sentenced to time served, according to court records.

Djemal was formerly a partner and 25 percent owner of InvestaBank, which was established in 2014 from a Mexican banking group’s acquisition of Royal Bank of Scotland’s operations in Mexico. Djemal’s involvement with InvestaBank ended in January 2017, a spokeswoman for the company told Reuters last year.

Prosecutors said that from 2011 to 2016, Djemal and the three other defendants fraudulently claimed tax refunds from the Mexican government by purchasing outdated cellular phones through front companies and selling them to front companies in the United States.

Exporting certain products, including cellular phones, from Mexico allows Mexican companies to claim tax refunds.

Prosecutors said that once the phones reached the United States, they were shipped back to Mexico so they could be used in the same way again. The scheme ran from 2011 to 2016, according to prosecutors.

In the course of the scheme, the Mexican government paid out about $21 million in tax refunds to the front companies, and the defendants moved more than $100 million through accounts maintained by those companies, prosecutors said.

Reporting By Brendan Pierson in New York; Editing by Marguerita Choy

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