Former CEO of Dallas beverage company sentenced to 10 years in prison for fraud

A former CEO of a Texas beverage company was sentenced this week to 10 years in federal prison for fraudulently selling more than $12 million of stock in Dallas-based EarthWater Limited to elderly and other vulnerable victims, according to a news release.

Four other people have also been sentenced to prison for their roles in the scheme, according to the U.S. Attorney’s Office for the Northern District of Texas.

According to court documents, Cengiz Jan “CJ” Comu, 62, of Dallas, EarthWater’s former chief executive officer; John Mervyn Price, 67, of Dallas, former chief operating officer; Richard Laurence Kadish, 61, of Del Ray Beach, Florida; Richard Lawrence Green, 71, of Deerfield Beach, Florida; Suzanne Aileen Gagnier, 68, of Huntington Beach, California, and others conspired to defraud victims and made false representations about how EarthWater would use investors’ money.

Comu, Price, Kadish, Green, Gagnier, and their co-conspirators falsely represented that more than 90 percent of money raised from investors would be re-invested in the company. The funds were used for the conspirators’ personal benefit, the U.S. Attorney’s Office said.

Comu pleaded guilty to 23 counts including conspiracy to commit mail fraud and wire fraud, mail fraud, wire fraud, and money laundering. Price pleaded guilty to 22 counts of conspiracy to commit mail fraud and wire fraud, mail fraud, wire fraud, and money laundering, and was sentenced to six years in prison. Kadish and Green each pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud and one count of mail fraud. They were each sentenced to six years in prison. Gagnier pleaded guilty to one count of conspiracy to commit mail and wire fraud and was sentenced to two years in prison.

Six other defendants charged in the fraudulent scheme have also pleaded guilty and are awaiting sentencing. The defendants are Harley E. “Buddy” Barnes, III, 64, formerly of Plano, Texas, former chief financial officer; Russell Filippo, 72, of Oklahoma City; Daniel Thomas Broyles Sr., 65, formerly of Malibu, California; Joe Edward Duchinsky, 67, of Norwalk, California; Joseph Lucien Duplain, 81, of Murrieta, California; and Donald Andrew Rothman, 75, of Coral Springs, Florida.

The U.S. Postal Inspection Service investigated the case.

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline: 1-833-FRAUD-11 (1-833-372-8311).