Petaluma man sentenced to prison in $8 million wire fraud scheme

A 65-year old Petaluma man was sentenced Wednesday to three and a half years in federal prison for what the U.S. Attorney’s Office described as his leading role in a 10-year-old wire fraud scheme that netted nearly $8 million by convincing victims a wealthy heiress needed help paying her medical bills.

Over the course of several years, Robert Stephens and four co-conspirators told numerous victims they would eventually receive $1,000 for every $1 they paid to help cover the medical costs of a sick heiress whose billion-dollar estate was tied up in a secret probate case, according to the office of Brian Stretch, the U.S. Attorney for the Northern District of California.

Victims were promised their investment returns would be paid as soon as the heiress’ money was released from probate, but there was no heiress and no large estate; Stephens and his co-conspirators pocketed the money instead.

Stephens’ sentence, which he was ordered to begin serving Oct. 20, was handed down Wednesday by U.S. District Judge Lucy Koh in San Jose. Stephens pleaded guilty in June 2016, and each of the other co-defendants have entered guilty pleas for their roles in the conspiracy as well, the U.S. Attorney’s Office said.

Stephens was indicted by a federal grand jury in December 2015 and charged with conspiracy to commit wire fraud, 22 counts of wire fraud and one county of money laundering. He pleaded guilty to one count on each of those charges and the remaining charges were dismissed, the U.S. Attorney’s Office said.

In his guilty plea, Stephens admitted to defrauding victims of at least $5.6?million from at least 2009 through December 2015. But Koh found Stephens had run the scheme since 2007, and the court concluded it had yielded him and the co-defendants nearly $8 million. The court also found Stephens responsible for recruiting most of the victims, according to the U.S. Attorney’s Office.

Koh ordered Stephens to serve three years of supervised release after his prison term and pay $7.9?million in restitution and a forfeiture money judgment of $5.6 million.

Koh previously sentenced co-conspirator Laurence Miles, 76, of Arizona and co-conspirator Rayan Lakshmanan, 48, of Davis to 108 months in prison and 18 months in prison, respectively.

The two remaining co-conspirators - Munsif Shirazi, 49, of Bell Canyon and Shirley Molina, 70, of Hawthorne - will be sentenced later this year, according to the U.S. Attorney’s Office.

The case was prosecuted after an investigation by the FBI and IRS.

You can reach Staff Writer J.D. Morris at 707-521-5337 or jd.morris@pressdemocrat.com. On Twitter @thejdmorris.