James S. Eberhart, Internet Huckster, Faces 11 Counts of Mail Fraud and Nine Counts of Money Laundering

Categories: Crime-iny
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A former Newport Beach resident who fled the country in 1999 after federal authorities executed a search warrant at his allegedly fraudulent Internet company landed back in the United States on Thursday after being deported earlier this week from Malaysia. 

James S. Eberhart, 71, arrived at Los Angeles International Airport and was expected to make his first appearance Thursday in U.S. District Court in Los Angeles, according to the FBI.

 
The FBI received a tip as to Eberhart's whereabouts in Maylasia. The FBI had been seeking information from the public on its website, and the FBI Legal Attaché in Kuala Lumpur shared the information with authorities in Maylasia. 

Malaysia deported Eberhart because his U.S. passport had expired, authorities said. 

A 2002 Grand Jury indictment alleges that Eberhart and another man--63-year-old Eugene M Carriere--operated a phony Newport Beach company called YES Entertainment Network Inc.

Eberhart is charged with 11 counts of mail fraud and nine counts of money laundering. He and Carriere used telemarketers at outside firms and written promotional materials to dupe investors by claiming that YES was creating and maintaining an 18-channel, multimedia, family-oriented website, according to the FBI. Prospective investors were told that YES would generate profits through the sale of advertising on the website. 

Between February 1999 and October 1999, Carriere and Eberhart allegedly raised nearly $14 million in investor funds through a network of nearly two dozen telemarketing "boiler rooms" across the U.S. and Canada. Once YES received money from investors, 45 percent of those funds were given to the outside telemarketers as a sales commission, according to the indictment, which also alleges that the remaining investor funds primarily went to Carriere and Eberhart. 

Carriere was a fugitive for six years before being arrested in Thailand in April 2005. He pleaded guilty to two counts of mail fraud on April 30, 2007, and on July 27, 2007 was sentenced to three years in federal prison and ordered to pay $12,838,045 in restitution.

Five other defendants connected to the operation, including the owners of telemarketing operations used by YES, were indicted, pleaded guilty, and were sentenced to as much as 142 months in federal prison.

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