Estonian Investment Fraud

handcuffed hands in a row For conspiring to defraud a federal overseas investment program of millions of dollars purportedly to fund a bakery and mill in Estonia, four men were sentenced to prison and ordered to pay more than $2 million in restitution.

In a courtroom packed to overflowing last week with friends and relatives of the defendants, U.S. District Judge Marilyn Hall Patel sentenced Donald Davis and Tapani Koivunen, to two years in prison.  She also ordered Martin W. Washburn and Sergei Shkurkin to serve one year each in prison.

The men sought loans from the Overseas Private Investment Corporation of $9.4 million but received a total of $7.9 million, according to the prosecutors.

OPIC is a federal agency whose mission is to encourage U.S. companies to invest overseas in business projects.

Once they received the money they admitted they falsified invoices with inflated equipment prices and concealed the close relationship of the companies involved in the Koivunen, 54, Davis; Washburn, 79, also from Morgan Hill and Shkurkin, 57, is also from Davis.

The four were all held jointly liable for the $2 million in restitution.

 Case: U.S. v. Daniels, No. CR09-862MHP

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