Six area businesspeople were ordered on Thursday to repay a total of $17 million they swindled from investors, federal court records show.
Kenneth Grant of Copley, Thomas Abdallah of Brunswick, Jeffrey Grant of Copley, Mark George of Independence and Jerry Cicolani, formerly of Richfield, were sentenced to prison in addition to restitution. Terms ranged from 21 to 92 months. Kelly Hood, formerly of Richfield, was ordered to spend a year under home confinement followed by a term of probation.
Court documents indicate the six, who pleaded guilty, defrauded 70 investors between 2010 and 2014. Grant and Abdallah, the ringleaders, told investors they owned and operated KGTA Petroleum — a company that allegedly earned profits buying and selling crude oil. However, they didn’t have agreements in place to buy and sell oil, and they never filed documentation with the Securities and Exchange Commission.
The group used investor money to purchase luxury items, including a Mercedes Benz, a boat and mortgage for high-end residential properties.
The case was prosecuted in federal court after an investigation by the FBI and the IRS.
Kathy A. Enstrom, a special agent in charge of IRS Criminal Investigation, said the damage caused by the defendants’ deceit could take years to repair.
“When you knowingly mix deceit and trickery into the financial well-being of individuals,” she said, “you create a recipe for devastation that could last a lifetime.”
FBI Special Agent in Charge Stephen D. Anthony said the defendants “callously preyed on the desires of many to make wise investments for a secure future and duped them out of their life savings.”
“Fraudsters such as these remain a top priority of the FBI,” he added.
U.S. Attorney Carole S. Rendon, whose office handled the case, agreed with Anthony, saying: “These defendants swindled people out of millions of dollars so they could live extravagant lifestyles. This was flat-out fraud. The defendants knew fully that they were stealing from the investors.”