The FBI requests that anyone
with information regarding the DiBrunos contact FBI Headquarters/Charlotte,
NC, (704) 377-9200; this appeal was also aired in a Special Report
by CBS News Reporter Molly Grantham, WBTV/Charlotte, NC.
The DiBruno Family has perpetrated
various and sundry fraud schemes for at least two generations. They
have promoted everything from non-existent gold mines to cholesterol
free milk, going as far as to identify themselves as representatives
of the Knights of Malta. They have scammed hundreds of victims,
defrauding them of tens of millions of dollars, from New York to
Florida, and the Carolinas to Colorado.
At this point, from our perspective,
this case is essentially over. We put together a criminal
case for submission to the Office of the United States Attorney/Charlotte,
NC; the Internal Revenue Service, Criminal Investigation Division/Charlotte,
NC; the Federal Bureau of Investigation/Charlotte, NC; The Securities
and Exchange Commission; and the Florida Division of Securities.
The DiBruno Family, and their criminal activities are currently
the subject of federal criminal investigations conducted by Special
Agent Robert Ripley, IRS Criminal Investigations Division/Charlotte,
NC, and Special Agent Doug Curran, FBI/Charlotte, NC.
We became involved in this case in
June 2004. Attorney Gary J. Welch of the Law Firm of Johnston, Allison
& Hord, P.A., 610 East Morehead Street, Charlotte, North Carolina,
28202, contacted us on behalf of two Investors with regard to this case and retained us to investigate
the facts 'and circumstances that gave rise to their victimization.
This was an interesting case.
The case was unusual from the beginning
in that our Client's moral outrage seemed to exceed their sense
of financial loss - not that this is unusual in and of itself. Most
victims react to being defrauded the same way, but eventually conclude
that recovering money is their priority. In this case, from the
first day, to the last day of our investigation, our Clients maintained
that justice was more important than being made whole. They perceived,
and rightly so, that they had been defrauded because nobody before
them had ever fought the fight necessary to shut these people down,
and they made it clear that the buck was going to stop here.
As the investigation progressed, it
became obvious that the DiBruno Family from Belmont, North Carolina,
have been engaged, and continue to be engaged in "investment"
related scams that have given rise to a number of actions in various
state and federal courts. For example:
On May 12, 1989, the Securities and
Exchange Commission filed a Complaint in the United States District
Court, Western District of North Carolina, Charlotte Division,
alleging that DiBruno SR, et al., were engaged in violating the
securities laws of the United States, by and thru their corporate
entity, National Gas & Power Co., Inc., [NGP], a Delaware
corporation doing business in North Carolina. The Docket Sheet,
Findings of Fact, and Permanent Injunction are appended as follows:
According to the above referenced
documents, Joseph DiBruno, SR refused to testify, and instead,
invoked his 5th Amendment Right to Remain Silent (Findings at
page 17). The Court found that the Defendants, inter alia:
"NGP and DiBruno knew
that NGP was insolvent; yet, Investors were not provided truthful
information concerning NGP, either at the time they bought the
stock, nor at any time thereafter. Investors were told NGP operated
a recycling plant in Virginia and that it had been awarded contracts
by municipalities, some of which had purportedly issued millions
of dollars in bonds to facilitate NGP, all of which was false
. . . The theft of investors' funds is obviously material, and
that is exactly what DiBruno was doing . . .” (Findings
at pg 23)
Specifically, the Court held that
the Defendants:
Unlawfully sold millions of shares of unregistered stock
in NGP (Findings at pg 18 para 1); and
Misrepresented the value of the NGP stock to investors (Findings
at pg 18 para 2); and
Failed to disclose the theft of investor's funds by DiBruno
(Findings at pg 18 para 2); and
Failed to disclose that NGP was actually insolvent (Findings
at pg 18 para 2)
The Court issued a Permanent Injunction
forever enjoining DiBruno from engaging in a similar pattern
of activity. An in depth review of the facts and circumstances
of this case can be found in a public record Declaration,
subsequently filed in Mecklinberg County, NC (See pages 5-10)
On September 24, 1993, the Securities
Exchange Commission filed a Complaint in the United States District
Court, Southern District of Florida, styled SEC v. U.S. Dairy
Corp., et. al., Civil Action No. 93-14181. The SEC alleged that
Cecil L. Minges, et al., were engaged in violating the securities
laws of the United States, by and thru their corporate entity,
U.S. Dairy Corporation, Inc. The Docket Sheet is appended as follows:
On August 25, 2994, the SEC won
a JUDGMENT OF DISGORGEMENT AS TO JOSEPH A. DIBRUNO in
the NGP case. According to the above referenced Docket entry
for that date says, "The Defendant Dibruno shall be
liable in this action for the disgorgement of $508,279 obtained
as a result of the conduct alleged in the Commission's Complaint,
plus prejudgment interest, etc."
On October 20, 1994, less than
two months after the SEC was awarded the Order of Disgorgement
against DiBruno, and less than a month after the Consent Order
was entered against Minges, DiBruno SR incorporated Golden Jersey
Products, Inc., [GJP] in Vero Beach, Florida to replace US Dairy,
the entity that the SEC shut down.
The fate of this "Investment
Opportunity" is best illustrated by the Notice
to Shareholders. Please note that the link between
US Dairy, and Golden Jersey, is established by this document
that says, in pertinent part:
"Shareholders of the new
Florida corporation (GJP) were comprised of shareholders of
the predecessor company (U.S. Dairy) and new subscriber investors,
the latter increasing in number through at least the early part
of 2001."
Even while the SEC successfully
pursued it's case against DiBruno in the US District Court,
Western District of North Carolina, DiBruno was actively engaged
in the same sort of unlawful activity in the Southern District
of Florida, but the truly remarkable thing is, even after the
SEC shut down the US Dairy scam in the Southern District of
Florida, the very same people went right on perpetrating the
exact same scam, from the same physical office space, using
the same staff, before the ink was dry on the signature page.
DiBruno, aided by his criminal cohort, Cecil L. Minges, and
his eldest son, Joseph A. DiBruno, JR, printed piles of worthless
stock certificates and sold them to hapless "investors."
In the end, the above referenced Notice
to Shareholders informed them that:
"Golden Jersey Products,
Inc. today has no assets and carries several outstanding debts"
On December 9, 1999, a group of investors
filed a Complaint in US District Court, Southern District of Indiana,
Florida, styled Cho, et al., v. Golden Jersey, et al., in which
the plaintiffs alleged that they had been defrauded by Golden
Jersey, DiBruno, Sage, Deshon, et al. According to Attorney Dean
T. Cho, (212) 947-3330, the matter has since been refilled in
New York where it is currently pending. The Docket Sheet is appended
as follows:
On November 19, 2002, South Carolina
resident Ruby Wells filed suit in the case styled, Wells v I.
B. D. Group, Inc., et al., Court of Common Pleas of South Carolina,
Fifteenth Judicial Circuit Georgetown County, Case No 2002 CP
22945. Ruby Wells was one of the first known victims of a scam
perpetrated by the DiBrunos, where the involvement of DiBruno
SR was not readily apparent. The Complaint is appended as follows:
On November 14, 2003, in the
matter of, Wells v I. B. D. Group, Inc., et al., Court of
Common Pleas of South Carolina, Fifteenth Judicial Circuit
Georgetown County, Case No 2002 CP 22945, the Court awarded
Ruby Wells a judgment against DiBruno JR in the amount of
$74,500.
On July 7, 2004, Investor Kenneth
D. Aranoff filed a Complaint in the US District Court, suit against
Joseph DiBruno, JR, members of the DiBruno Family, et al. In this
Complaint, Atty. Paul Donahue's opening paragraph states:
Joseph A. DiBruno, Jar.,
and Joseph A. DiBruno, Sr. are a father and son team of con
artists. They were assisted in some of their fraudulent endeavors
by family members and coconspirators Nicholas A. DiBruno and
Lela L. DiBruno and others. They have bilked scores of people
in more than a dozen states out of millions of dollars. They
have formed dozens of "corporations" under Florida
and North Carolina law and have lured innocent investors into
entrusting them with their money as an "investment"
in one or more of these so-called "companies," many
of which were mere shell entities, existing on paper only,
with no business, no employees, no assets, no bank accounts
and no real or other property. Trusting individuals have learned
with shock that funds they thought were going into real companies
have disappeared into the DiBrunos' pockets or have been diverted
to other companies controlled by the DiBrunos which then collapsed,
with the investors losing everything.
Like his father before him, Joe
DiBruno, JR took refuge in the 5th Amendment. The entire Complaint
is appended as follows:
In most of our cases, the fraudsters involved can be persuaded to
satisfy our Clients - not because it is the right thing to do, but
because it is the rational thing to do as a purely pragmatic business
decision. Rather than risk having their scam exposed, their operation
dismantled, find themselves facing indictment, and dealing with
the distasteful realities of prison, it makes sense to settle with
the victim likely to "upset their applecart." Especially,
when all this really means to the fraudster is giving back some,
or most, of the money they stole in the first place.
Not in this case.
Once the family became aware that I
was investigating them, I received a call from Joe DiBruno, SR,
the man behind the DiBruno Family machine. This was to be expected.
Professional scam artists are, by their very nature, persuasive;
for them, words are the instruments of deception and they rely upon
their skills at communication to make things go their way. They
have the mentality that if they can talk to you, they can deal with
you.
I tried to be reasonable, and I explained
that our Clients were genuinely and completely committed to see
justice done no matter the cost or personal sacrifice - the DiBruno
Family's ongoing criminal enterprise was going to be destroyed.
In a remarkable display of arrogant indignance, with a pomposity
that only a professional con man could muster, Joe DiBruno, SR declared
that our Clients would never see a dime - no matter what. It was
as if he could not believe that anyone would have the audacity to
think they could hold him accountable, or that justice was attainable.
He seemed self righteously offended that our Clients believed they
could war with him and win.
It was a bad call, a wonderful exercise
in poor judgment.
We pursued the investigation
of this case following the government model - we interviewed witnesses,
developed confidential sources, collected evidence and information,
while Atty. Welch subpoenaed everything necessary for us to get
the job done. Atty. Welch made the case, and used the resultant
judgment to execute against every asset in sight, including their
homes.
Atty. Welch followed up by
domesticating the North Carolina Judgment against Minges in Florida.
On September 29, 2004, the two Investors we worked for filed an Amended Complaint in The General
Court of Justice, Superior Court Division, County of Mecklenberg,
North Carolina, FILE NO: 04-CvS-11181, against:
Joseph A. DiBruno, SR
Lela DiBruno
Joseph A. DiBruno, JR
Nicholas DiBruno
Cecil L. Minges
Kolur Blynd Records, INC
K.B. Records, INC
DiBruno Brothers Mining, INC
In this Amended Complaint, Attorney
Gary Welch stated, inter alia:
Upon information and belief,
DiBruno, Jr. and/or the other DiBrunos have formed numerous
"corporations" under North Carolina, Florida and Delaware
law and have lured innocent investors into entrusting them with
their money as an "investment" in one or more of these
so-called "companies," many of which were shell entities,
existing on paper only, with no business, no employees, no assets,
and no real or other property. Kolur Blynd Records, K.B. Records
and DBM are just three of the so-called "companies"
utilized by the DiBrunos to defraud our Investors out
of more than
$1,000,000.00.
For further information, please
see the following documents:
Facing contempt proceedings before the US District Court, Southern
District of Indiana, the DiBrunos did a remarkably stupid thing
- they filed bankruptcy. In so doing, they invited Atty. Langdon
Cooper, Trustee, US Bankruptcy Court, Western District of North
Carolina, into their lives along with his Special Investigator,
Ron Guerette of Charlotte, NC, and The Honorable Graham C. Mullen,
Chief United States District Court Judge.
Sometimes, when dealing with professional
criminals, things happen that make you wonder if you are in the
presence of divine intervention; in any event, watching the DiBrunos
leap from the frying pan into the fire was extraordinary.
For those who may not see the issue,
bankruptcy is not your run-of-the-mill civil litigation where two
parties face off behind two lawyers who say whatever sounds good
- bankruptcy is a petition for the federal government to intervene
in your life and intercede on your behalf. The bankruptcy Trustee
is assigned to work with a federal judge and between them, they
are entrusted with the responsibility to see the fair thing done.
They have a great deal of power in that regard and they are supported
by the United States Marshals Service, Americas oldest federal law
enforcement agency.
The documents that the DiBrunos
filed reflect that they have no significant assets.
Whereas the DiBrunos have had great fun protesting their innocence
and indigence in prior cases, Trustee Langdon Cooper was not amused.
He consolidated the cases and removed them to US District Court
where he persuaded The Honorable Graham C. Mullen, Chief United
States District Court Judge, to: 1) Allow our Investors to finance the Trustee's efforts to pursue the case; 2)
Allow the Trustee to enlist the Attorneys and I to assist; 3) Permit
the search of the Debtor's residences and storage facilities without
prior notice and 4) Assign the US Marshal's Service to enforce the
authorization to search.
We also put together a criminal case for submission to the
Office of the United States Attorney/Charlotte, NC; the Internal
Revenue Service, Criminal Investigation Division/Charlotte, NC;
the Federal Bureau of Investigation/Charlotte, NC; The Securities
and Exchange Commission; and the Florida Division of Securities.
We provided them with a 586 page report, including graphic cash
flow analyses of the various scams.
Although the report itself
is best left confidential at this point, I do feel that the publication
of a few of the graphics might serve the public interest. In my
experience, con artists lie even unto the point that the truth would
better serve them, and the DiBrunos are no exception. Predictably,
they will continue to protest their innocence, and maintain that
this is all a terrible slime job, perpetrated by disgruntled investors.
There are many millions of
dollars involved, but these are a few examples of the DiBruno approach
to the management of investment capital.
At this point, the DiBrunos have been reduced to pleading
for sympathy based upon medical maladies, proffering doctor's letters
claiming that they suffer from physical, mental and emotional disorders
ranging from urinary incontinence to a nervous breakdown that would
preclude assisting in their own defense.
In closing, I would like to observe
that my Clients initiated this investigation resolved to stop the
DiBruno Family's ongoing criminal enterprise at all costs and they
maintained that resolve, and saw this thing thru, at significant
cost and personal sacrifice. In a very real way, they have salvaged
the lives of those that the DiBrunos would otherwise have destroyed
and although they will never know who, and nobody will ever know
to thank them, it is a certainty that their personal sacrifices
have saved a great many people untold grief, anguish and ruin. Financial
devastation that would otherwise have been, will not be, marriages
will not be strained to divorce, families will not be torn to turn
upon one another, and elderly people will be able to live comfortably
on the fruits of their life's work because of principled, determined
stand that they took.
I doubt that I will ever again see
anyone go to such expense, and give so much of themselves, in an
effort to see justice done.
As previously stated, this matter
is currently the subject of federal criminal investigations conducted
by Special Agent Robert Ripley, IRS Criminal Investigations Division/Charlotte,
NC, and Special Agent Doug Curran, FBI/Charlotte, NC.
The Indictments, Plea Agreements and
Sentencing Orders will be published as soon as they are available.
The FBI requests
that anyone with information regarding the DiBrunos contact FBI
Headquarters/Charlotte, NC (704) 377-9200.
Oracle International
Bill E. Branscum, Investigator
OracleIntL@aol.com
(239) 304-1639
