Shelly S. Singhal, Newport Beach Broker, Faces Second Fraud and Conspiracy Indictment in 2 Years
Supplying the local hook is Shelly S. Singhal, 43, of Newport Beach, who has been charged in the latest case alongside Loretta Fredy Bush, 52, of Shanghai via Utah, and Dennis L. Pelino, 63, of Miami Beach.
William P. Barrett, better known to Forbes readers as Informer, boasts that reporting the financial mag did in July 2007 presaged the new conspiracy case. The earlier piece reported the settlement of a long-running Internal Revenue Service investigation of Bush, who was alleged to have hidden taxable income by calling the proceeds loans.
According to last week's indictment, Bush, Singhal and Pelino are accused of hiding sales of their early shares in the Chinese company Xinhua Finance by labeling them loans.
Barrett writes that the easily accessible information on the IRS case against Bush calls into question the due diligence performed by some of Xinhua Finance's famous investors, who include Southern California billionaire Ron Burkle, owner of the Yucaipa Companies, a close friend of the Clintons and a backer of the recent campaign to keep the NBA's Kings in Sacramento.
A background check of Singhal would have also borne tainted fruit. He was indicted in 2010 on three counts of securities and mail fraud and conspiracy in connection with what the feds said was a plot to "scalp" shares, or trade with advance knowledge that favorable promotional materials were to be disseminated. Singhal pleaded not guilty, and the case has yet to go to trial.
In the latest case, Singhal, Pelino and Bush are charged with nine criminal counts each of conspiracy, mail fraud and making false statements. Pelino faces an additional count of lying to an FBI agent. Filed by the U.S. Attorney's office in Washington, D.C., the indictment seeks forfeiture of $50 million in what it calls ill-gotten gains.
The three defendants have denied wrongdoing, accusing the government of mistaking routine business actions with crimes. Three others, not named, have already pleaded guilty in the case.