The FBI Informant And The $3 Billion Bogus Siberian Pipeline

A. The Scheme

[Thomas] Re was the CEO of Universal Lending Group ("ULG"), a small brokerage firm based in Garden City, New York. Re acted as a "salesperson and networker" for the company; he  solicited companies looking for financing and his associate, Joseph Bianco, then matched  projects with a hedge fund or bank to act as lender. Re was also an informant for the FBI:  Before he worked at ULG, Re sold vending machine routes to snack-food companies. On occasion, Re sold distributors a fake route-the distributors would arrive at a location and find  no machine-and the FBI eventually caught up with him. In the hopes of receiving a lighter  sentence, Re agreed to turn over information to the FBI about others participating in the vending machine scam. 

Re encountered the defendants seven months after he began working with the FBI. Re received a call from an acquaintance, Charles Frazier, who told him to look out for a financier named Emerson Corsey-Juncal, Campbell, and Sampson's co-defendant. Corsey called a few days later and explained that he was the Chief Operating Officer of Magnolia International Bank and Trust ("MIBT"), a bank that Corsey described as holding assets of sovereign wealth funds. Corsey said that MIBT wanted to borrow three billion dollars to build a pipeline in Siberia and could offer five billion dollars in U.S. Treasury notes ("T-notes") as collateral for the loan. Re said he would think about it. 

Re told his associates about the proposal and, after a brief Google search, they told him the deal "smelled." J. App'x at 516. Re then reported the potential fraud to his FBI handler, who instructed Re to record his conversations with Corsey. 

Over the next few months, Re recorded the defendants as they baited him with an escalating series of lies: Corsey explained that MIBT was the central bank for scores of Native American governments, including the Yamasee Indian tribe, a nation with trillions of dollars in  assets. Corsey then said that the bank currently represented John Juncal, a "counsel  extraordinaire" for the Republic of Buryatia who had been appointed "Vice Premier of Record  under the Edict of the Ukase" by the Buryatian government, and the official charged with finding  backers for the pipeline. When Re expressed skepticism, Corsey sent him an email with copies of "bond indentures." J. App'x at 1021-22. The indentures bore the seal of the Vice-President of Buryatia, and stated that they were valued at five billion U.S. dollars and secured by T-Notes.  The certificates were assigned to "the Great Siberian Pipeline Corporation," which was "a Republic of Wyoming Corporation." Id. The email also contained proof that Juncal controlled  the T-notes: Corsey included another certificate signed by Juncal that listed CUSIP numbers for the T-notes (as an expert would later testify, CUSIP numbers are alphanumeric code created by the U.S. Treasury to identify individual bonds). 

Prompted by his handler to record statements by more of the defendants, Re asked to speak with Sampson, the purported Chief Financial Officer of MIBT. Sampson laid out the math behind the deal: MIBT's client, John Juncal, would assign the T-notes to Re's client. The T-notes would yield a minimum of 3.9% interest per year and generate over fourteen billion dollars in profit over the course of five years. When Re asked for additional evidence of the T-notes' authenticity, Sampson sent Re an email from an AOL account for MIBT, rather than from MIBT's own domain name. Attached to the email were unformatted files containing copies of the T-notes; Re had to use Word Pad to open those files. Sampson then e-mailed Re a "Letter of Acceptance" that re-explained the financing. The letter stated that, in exchange for a loan of three billion dollars, Re's client would receive T-notes that would yield a 171% return on investment.

Re next pressed Corsey and Sampson to show him physical evidence of the T-notes' existence. And at that point, Corsey put Re in touch with James Campbell, an associate of  Juncal's. Campbell explained that Juncal had hidden the bonds in Austria in order to prevent  enemies from "basically steal[ing] these from him and bump[ing] him out of the corporation." J. App'x at 1109. Re pretended to buy the excuse, but later asked if he could speak with Juncal  directly. Juncal agreed, and sought to assuage Re's fears by comparing his role to the historic  secret mission of Christopher Columbus. 

During his testimony at trial, Re admitted that much of the talk struck him as ridiculous, and that at some point he stopped believing the deal was real. But because of his relationship with the FBI, he continued working with the quartet of pipeline pipe-dreamers. In March, it came time for the deal to close, and Re arranged to meet Campbell and Sampson in New York to sign documents memorializing their agreement. On the day of the closing, the FBI arrested all four defendants; Campbell and Sampson were arrested in New York, Corsey was arrested in Atlanta, and Juncal was arrested at his home, a motel in Whitefish, Montana. 

At trial, the government relied almost exclusively on Re's testimony. No defendant took the stand, and the defense attorneys focused their defense on attacking Re's testimony. After a short deliberation, the jury returned a verdict of guilty for all four defendants. The appellants' motions for judgment of acquittal were denied and the cases proceeded to sentencing. .  .

Corsey then said that the bank currently represented John Juncal, a "counsel extraordinaire" for the Republic of Buryatia who had been appointed "Vice Premier of Record under the Edict of the Ukase" by the Buryatian government, and the official charged with finding  backers for the pipeline.

Campbell explained that Juncal had hidden the bonds in Austria in order to prevent enemies from "basically steal[ing] these from him and bump[ing] him out of the corporation." J. App'x at 1109. Re pretended to buy the excuse, but later asked if he could speak with Juncal  directly. Juncal agreed, and sought to assuage Re's fears by comparing his role to the historic secret mission of Christopher Columbus. 

• Fraud
• EDNY
• Juncal
• Corsey
• Siberian Pipeline
• Fraud
• Bill Singer
• BrokeAndBroker