NEW YORK — A former New York trucking company owner has been indicted for conspiracy to commit wire fraud, wire fraud and aggravated identity theft in connection with various alleged fraud schemes relating to his trucking business.
According to an April 19 news release from United States District Attorney for the Southern District of New York Damian Williams and Assistant Director-in-Charge of the New York Office of the FBI Michael J. Driscoll, Franklin Ray, who operated CSA Business Solutions LLC, was previously convicted of wire and bank fraud in the Eastern District of Michigan and was released from prison in 2010.
Joseph Winget, Ray’s co-defendant, has also been arrested in connection with Ray’s alleged New York scheme, according to the news release.
“We allege Ray used his purported trucking companies as vehicles for fraud, including by submitting fraudulent applications for small business loans during the Covid-19 pandemic, and by fleecing investors into giving him tens of millions of dollars to participate in a business that was a scam,” Williams said.
“Ray knew that his actions were illegal, having been convicted of similar crimes more than a decade ago. Ray may not learn a lesson from his latest actions, but he will face justice for them.”
Driscoll said that Ray “operated a Ponzi scheme that defrauded hundreds of investors of more than $40 million. Mr. Ray was even bold enough to continue his alleged activity subsequent to his most recent arrest. Today’s charges will force him — yet again — to face the consequences of his illegal activity in the federal criminal justice system.”
According to court documents, beginning in at least June 2021, Ray began to offer investors an opportunity to invest in his trucking and logistics company, CSA Business Solutions LLC.
Specifically, Ray and the investors entered into contracts pursuant to which, for each $20,000 contributed by the investor, CSA Business Solutions LLC would procure and operate a truck in its trucking business, the court documents state.
Ray told investors that the trucks would perform delivery services for a multinational e-commerce company and/or a multinational shipping company, and that the investors would be entitled to 77% of the net income of the trucks, according to the court documents.
“After the investors purchased the rights to trucks from CSA Business Solutions LLC, Ray sent them falsified spreadsheets at regular intervals, purporting to show the performance of their trucks during the relevant period,” the court documents state.
“In truth and fact, CSA Business Solutions LLC operated few trucks and had minimal revenues from trucking activities. Instead, investors in the Truck Investment Scheme received payments from new investments into the scheme or from other sources. Ray ultimately induced approximately 275 investors to purchase over 2,000 trucks, totaling at least $40 million in fraudulent investments.”
Ray is also charged with carrying out fraudulent schemes to obtain over $1.9 million in government-guaranteed loans designed to provide relief to small businesses during the COVID-19 pandemic on behalf of CSA Business LLC and another Michigan-based trucking company.
In connection with the Small Business Administration (SBA) Loan Fraud Schemes, the court documents state that Ray submitted false information and forged documents to the SBA and commercial lenders. He further claimed that these businesses engaged in significant trucking business, but they had minimal revenues and trucking activity.
Ray’s co-defendant, Winget, is charged with participating in one of the SBA Loan Fraud Schemes on behalf of CSA Business Solutions LLC, resulting in $1.1 million in fraudulently obtained loans, according to the court documents.
Finally, Ray is charged with fraudulently inducing a New York City based real estate company to pay a $175,000 deposit in order to pay for startup costs associated with setting up a joint venture between the company and CSA Business Solutions LLC.
“Ray induced the company to enter into the Joint Venture by misrepresenting CSA Business Solutions LLC and his own personal business experience,” according to the news release. “Ray spent the funds on personal expenses, including private airplane trips. The Joint Venture was never formed.”
Ray and Winget were arrested in early March 2022, and a CSA Business Solutions LLC bank account was seized at that time.
After his arrest, Ray continued to operate the Truck Investment Scheme, according to the news release.
“Ray misled investors about why he did not make expected payments after his arrest and hid the fact of his arrest and the seizure of the bank account,” the news release stated. “During this period, Ray caused the opening of new bank accounts on behalf of CSA Business Solutions LLC and continued to solicit and accept investor funds for trucks that did not exist.”
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