Two brothers from Stockton have been charged by a grand jury with wire fraud conspiracy.
A federal grand jury returned an eight-count indictment against Hector Perez, 34, and Flavio Perez, 29, for wire fraud conspiracy, while Hector Perez was also charged with wire fraud and aggravated identity theft.
The big picture: Court documents state that the brothers conducted a wire fraud conspiracy against at least four victims from May 2018 to November 2020.
- The victims were all invoice factoring companies, which provide immediate cash flow to a business in exchange for the business’s outstanding invoices. Those companies then have the right to collect the money owed by the debtors on those invoices.
- They created corporate entities posing as businesses seeking to sell fabricated debt in the form of fraudulent invoices. THey then sold those invoices to at least four different factoring companies. The victims transferred money back to accounts held under the control of the defendants and would never get paid on the fake invoices or would get much less than they were due.
- Any payments to the victims came from bank accounts held in the names of fictitious debtors.
- The payments were designed to disguise the fraud so that the defendants could avoid detection and continue the fraudulent activity.
- The total fraud came in at over $1.8 million.
What we’re watching: Hector Perez faces a maximum of 20 years in prison and a $250,000 fine for the wire fraud and conspiracy counts if convicted. He also faces a mandatory two-year prison sentence for the aggravated identity theft count.
- Flavio Perez faces a maximum of 20 years in prison and a $250,000 fine for the conspiracy count.
