Exotic Italian sports cars, diamond and ruby jewelry, computers, artwork and electronic equipment are among the proceeds of an alleged Ponzi scheme that federal authorities plan to offer for sale to the public.

The items, along with more than $2 million in cash in bank and brokerage accounts here and elsewhere, were seized following September 2006 raids by federal agents on a downtown Honolulu office and a Kahala home.

Four people were indicted on charges they participated in a scheme to bilk an unnamed investor out of $100 million.

All four — married couple Sayed Qadri and Patricia Roszkowski, along with Jeffrey Greenhut and Ruben Carrillo Gonzalez — have pleaded not guilty.

According to a September 2006 indictment, the couple used two companies — Amasse Capital LLC and Solomon & Co. — along with a false prospectus filed with the Securities and Exchange Commission to create the illusion they were at the helm of several high-volume securities trading firms in a high-yield investment scheme.

Qadri, Roszkowski and Greenhut allegedly claimed to have more than a decade of experience in international finance, mergers and acquisitions, securities trading venture capital and asset management. None of them had any of the experience they claimed to have, according to the indictment. And none are licensed to trade securities in Hawai'i, according to the state Department of Commerce and Consumer Affairs.

As part of the alleged scheme, the couple told the unnamed investor they traded an average of $500 million every two days and up to $10 billion in volume per month.

The investor was told his $100 million investment was guaranteed and risk-free, and that he would receive annual returns of at least 60 percent with the possibility of 100 to 400 percent monthly rates of return, according to the indictment.

The companies made limited investments and in fact incurred losses from bond trading, according to the indictment.

Authorities have frozen Qadri's bank accounts, confiscated the couple's automobiles and their passports.

NEW INDICTMENT PENDING

Trial is scheduled to start in May, but the U.S. attorney's office here has warned in court papers that a new, superceding indictment is being prepared that would further delay trial.

"They've been saying that since May and we haven't seen anything yet," said attorney Eric Seitz, who represents Qadri.

"The scope of the illegal conduct is larger than what has been alleged in the original indictment," said assistant U.S. attorney Chris Thomas in that May court filing.

"There will be a superceding indictment in this case and the government is in the process of contacting numerous witnesses from Canada and several states to include California, Washington, Utah, Michigan, Wisconsin, Arkansas, South Carolina and Florida individually and through their attorneys to coordinate and finalize further investigation," Thomas said in that filing.

Thomas was unavailable for comment last week on the status of the case.

COSTS PROMPT SALE

In the meantime, the government is proceeding with plans to sell the items seized from the Kahala residence of Qadri and Roszkowski and the offices of companies the defendants operated, Amasse Capital LLC, Solomon & Co. LLC, ALR Capital, LLC., and YS Capital LLC.

Seitz objected to the sale of the property before the trial of his client, but the government argued that the cost of storage and maintenance of some property, particularly the automobiles, was "excessive."

Last month, U.S. Magistrate Judge Kevin Chang approved sale of the seized items because of deteriorating conditions and depreciating values.

Proceeds of the sales, minus expenses such as storage costs and auctioneer commissions, will be deposited by the U.S. Marshal's Service in an interest-bearing account maintained by the U.S. Justice Department called the Seized Asset Deposit Fund, Chang ordered.

Some financial assets have already been sold, according to court records: 11,200 stock warrants in Lehman Brothers Holdings were sold for $71,357. They were originally purchased for $69,776.

Information about when and how the seized goods will be sold was not available last week. The Marshals office here said the individual who oversees the seizure program was out of town and would return next week.

Assistant U.S. Attorney Rachel Moriyama, who is handling the civil asset forfeiture and seizure case, also was unavailable for comment.

Reach Jim Dooley at jdooley@honoluluadvertiser.com.

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