LIT Update on CJ Comu’s Extended Delay in Sentencing
OCT 26, 2022
CJ Comu Seeks Delay in Sentencing
Government Object to Further Sentencing Delay for CJ Comu
Life is Easy in Seagoville, sayeth CJ Comu
The Federal Correctional Institution, Seagoville is a low-security United States federal prison for male inmates in Seagoville, Texas in the Dallas-Fort Worth metropolitan area. It is operated by the Federal Bureau of Prisons, a division of the United States Department of Justice.
Department of Justice Office of Public Affairs
FOR IMMEDIATE RELEASE
Friday, June 24, 2022
Serial Fraudster Previously Extradited from Mexico Pleads Guilty to Multiple Investment Fraud Schemes
A California man was extradited from Mexico on March 8 and pleaded guilty today to conspiracy to commit mail fraud and wire fraud, mail fraud, and money laundering charges for two high-yield investment fraud schemes.
According to court documents, Daniel Thomas Broyles Sr., aka Dan Thomas, aka Daniel Cruz Torrez, 64, of Malibu, participated in a high-yield investment fraud scheme involving a sham company named Niyato Industries Inc. Broyles admitted to conspiring with Niyato’s CEO, Robert Leslie Stencil, 65, of Charlotte, North Carolina, and others to defraud Niyato investors.
Broyles admitted that, together with Stencil and others, he falsely portrayed Niyato as a business engaged in electric vehicle manufacturing and converting vehicles to run on compressed natural gas.
In reality, Broyles knew, or intentionally avoided learning, that Niyato was merely a sham company that lacked any operational facilities or proprietary technology, and virtually all investor funds were being disbursed among the co-conspirators and not used to promote Niyato’s business.
In June 2016, after Broyles learned that federal law enforcement agents were investigating Niyato, he relocated to Mexico.
Broyles admitted that, when he learned in August 2016 that he had been indicted, he moved to a new address in Mexico and began using the alias “Daniel Cruz Torrez” to hide from federal law enforcement agents and to obstruct the federal government’s prosecution.
In addition, according to court documents, Broyles separately pleaded guilty for his role in a second high-yield investment fraud involving EarthWater Limited. Broyles admitted to conspiring with EarthWater’s CEO, Cengiz Jan Comu, 61, of Dallas, Texas, and others to sell EarthWater stock.
Broyles also admitted that he and others made numerous false and misleading representations, including that EarthWater used the money raised from victim investors to develop and operate the company’s business.
In truth, Broyles, Comu, and their co-conspirators had agreed to use the invested victim funds largely for their personal benefit.
Broyles pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud, one count of mail fraud, and one count of money laundering in connection with the Niyato scam.
Broyles also pleaded guilty to one count of conspiracy to commit mail fraud and wire fraud in connection with the EarthWater scheme. He is scheduled to be sentenced at a later date.
Broyles faces up to 10 years in prison for the money laundering count, up to 20 years in prison for the mail fraud count, and up to 30 years in prison for each of the conspiracy counts.
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Seven other defendants have previously been convicted in connection with the Niyato scam, including Stencil, who was convicted following a three-week jury trial and sentenced to 135 months in prison.
Eight other defendants have pleaded guilty in connection with the EarthWater fraud, including Comu, who is scheduled to be sentenced on Sept. 7.
Three other defendants are awaiting trial in the EarthWater case on charges set forth in a superseding indictment filed on Nov. 6, 2019, in the Northern District of Texas. The trial is scheduled to begin on Oct. 3.
Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division; U.S. Attorney Dena J. King for the Western District of North Carolina; U.S. Attorney Chad E. Meacham for the Northern District of Texas; Inspector in Charge Tommy Coke of the U.S. Postal Inspection Service’s Atlanta Division; and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service’s Criminal Investigations Group made the announcement.
The Government of Mexico, including the Fiscalia General de la Republica (FGR), provided significant assistance in the extradition of Broyles to the United States. The Justice Department’s Office of International Affairs also provided substantial assistance in securing the arrest and extradition of Broyles.
The U.S. Postal Inspection Service is investigating this case. The U.S. Marshals Service transported Broyles from Mexico to the United States.
Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section is prosecuting both cases. Trial Attorney Theodore Kneller of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary Walters of the U.S. Attorney’s Office for the Northern District of Texas are prosecuting the case involving EarthWater.
Department of Justice Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, June 11, 2020
Two Former EarthWater Executives Plead Guilty for Investment Fraud Scheme Targeting Elderly Victims
Two former executives of EarthWater Limited (EarthWater), a Dallas-based company, have pleaded guilty to fraud and money laundering charges for their role in a multi-million dollar high-yield investment fraud scheme that targeted elderly victims.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas and Inspector in Charge Delany DeLeon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group in Washington, D.C., made the announcement.
John Mervyn Price, 64, of Dallas, Texas, pleaded guilty today to one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud, 10 counts of wire fraud, and one count of money laundering, before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas.
Price will be sentenced on Oct. 7, 2020, before U.S. District Court Judge Ed Kinkeade.
Cengiz Jan Comu, 59, of Dallas, Texas, pleaded guilty on March 10, 2020, to one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud, 10 counts of wire fraud, and two counts of money laundering, before U.S. Magistrate Judge Toliver.
Comu’s sentencing is currently scheduled for July 8, 2020, before Judge Kinkeade.
As part of his guilty plea, Price, who had been EarthWater’s chief operating officer, admitted that, beginning in or about 2013 and continuing through on or about Sept. 30, 2016, he and Comu, who had been EarthWater’s chief executive officer, managed and supervised a scheme to defraud individuals by convincing them to invest in EarthWater under the false pretense that their investment would increase substantially in value in the immediate future.
Price further admitted that, in truth and in fact, he and his co-conspirators knew that the proceeds of EarthWater stock sales were not invested in EarthWater as described to investors, but paid out to Price and his co-conspirators to be used for their personal benefit. Price also admitted that Comu lied to investors about being a successful Wall Street veteran and that Comu had, in fact, defrauded EarthWater investors by misusing investor funds for Comu’s personal benefit.
Price also admitted that he and Comu partnered with two stock promoters, Richard Laurence Kadish, 59, of Miami, Florida, and Richard Lawrence Green, 69, of Deerfield Beach, Florida, to sell EarthWater stock and that whenever Kadish, Green or a salesperson that Kadish or Green recruited, made a sale of EarthWater stock to a victim, Comu and Price paid Kadish and Green a commission of approximately 50 percent of the victim’s funds.
Price further admitted that, starting in or about 2016, through in or about January 2019, Price also worked directly with another stock promoter, Russell Filippo, 69, of Oklahoma City, Oklahoma, to sell Price’s personal shares of EarthWater stock for approximately 30 percent commission.
Price told Filippo that Comu lied about being a successful Wall Street veteran and that Comu had, in fact, defrauded EarthWater investors by misusing investor funds for Comu’s personal benefit.
In addition, Price admitted he and Comu had engaged in monetary transactions in excess of $10,000 in funds obtained by defrauding investors through a company called Regus Advisors, Inc.
As part of his guilty plea, Comu similarly admitted that he conspired to obtain EarthWater investor funds through a scheme to defraud in which he made materially false and fraudulent misrepresentations to investors that the majority of their funds would be used to support EarthWater’s operations, when, in fact, the funds were used to pay undisclosed, excessive commissions to those selling EarthWater stock on Comu’s behalf.
Comu further admitted that he knowingly engaged in monetary transactions in amounts greater than $10,000 involving investor funds obtained as part of the fraudulent scheme.
In addition to Price and Comu, Kadish, Green, Filippo, and six other defendants have been charged in the Northern District of Texas for their roles in the EarthWater fraud, including
Harley E. “Buddy” Barnes, III, 61, of Plano, Texas;
Daniel Thomas Broyles Sr., 63, formerly of Malibu, California;
Suzanne Aileen Gagnier, 66, of Huntington Beach, California;
Joe Edward Duchinsky, 65, of Alhambra, California;
Joseph Lucien Duplain, 79, of Murrieta, California;
and
Donald Andrew Rothman, 72, of Coral Springs, Florida.
All of these defendants, except for Kadish and Rothman, were charged by a federal grand jury in a superseding indictment unsealed on Nov. 8, 2019.
Kadish was charged by a federal grand jury in an indictment filed on March 5, 2019, and Rothman was charged in an information filed on Sept. 6, 2019.
Kadish, Green and Rothman have pleaded guilty and are scheduled to be sentenced on Nov. 18, 2020, before Judge Kinkeade.
The remaining defendants are awaiting trial, which is currently set for Jan. 19, 2021, before Judge Kinkeade.
Barnes and Beth Ellen DeGroot, 59, of Plano, Texas, were separately charged by a federal grand jury in the Northern District of Texas with conspiracy to commit wire fraud and bank fraud and obstruction of justice relating to the ongoing investigation into EarthWater, in a superseding indictment returned on March 5, 2020.
Barnes and DeGroot are awaiting trial, which is currently set for Oct. 5, 2020, before Judge Kinkeade.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Postal Inspection Service. Trial Attorneys Christopher Fenton and Amanda R. Vaughn of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary F. Walters of the Northern District of Texas are prosecuting the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.
For Phyllis Comu, it’s not difficult to pinpoint the exact moment when she decided to make protecting animals a life long ambition.
Growing up in Dallas, TX her deep love for animals emerged when she was just a little girl.
One day on a walk with her father, they discovered a cardboard box in the middle of a railroad track. Peering inside, they were left shocked and dumbfounded by what what they discovered. Someone had left a box full of innocent Basset Hound puppies to their demise.
Phyllis could not comprehend how someone could commit such an atrocious act and took the puppies home with her, where she helped adopt them to good homes and even kept one that she named Clyde.
This experience became the turning point to her legacy in becoming an advocate for animals and helped pave the way to making a real difference in the world.
Not sure of how to turn a passion into a career, after attending the University of Texas, Phyllis explored opportunities to work in both the travel and floral design industries.
It wasn’t long before she realized where her ambitions and heart belonged.
Now, for the past 15 years, she has become a resourceful leader of animal advocacy in her community and has served a number of charitable animal organizations in the DFW area including, PETA, Legacy Boxer Rescue, Operation Kindness and the SPCA of Texas.
Phyllis is also the former Chair of the 2015 SPCA of Texas “Paws Cause” and is the present Chair for the 2016 SPCA of Texas “Fur Ball” Gala at the Omni Hotel in Dallas TX on September 24, 2016.
Along with her charitable work for animals, Phyllis also supports a number of non profits and is the President of Karma for Pets, a business she founded that provides charms that bring good luck to pets.
She serves on the Host Committee for the 2016 “Art from the Heart Celebrity Art Auction and Benefit,” is a member of The Women’s Council of the Dallas Arboretum, Les Femmes du Monde, Fashion Group International, American Heart Association, Kidney Texas and The Dallas Museum of Art.
Animal Lover and Philanthropist, Phyllis Comu
Although all animals are dear to her heart, Phyllis is a canine enthusiast.
Her and her husband CJ Comu, Founder & Chairman of EarthWater Inc., are the proud parents of two rescue Boxers named Turk and Roxy.
When speaking to Phyllis it’s difficult not to share in her infectious enthusiasm for supporting exploited animals. She pours her heart into every endeavor large or small, if it means that an animal will have a better life and by giving a voice to the voiceless, Phyllis Comu has made the world a much better place, not only for them; but for all of us.
What is behind your passion for helping and protecting animals?
Animals are my greatest love on this Earth. I can’t imagine living without having the opportunity to help animals. I feel it’s not only my responsibility but all people that can, should.
How do you decide which organizations /non profits to support?
I mirror my choice of charity from my mother and grandmother and what they instilled in me. But my love is animal charities.
What’s your favorite animal?
Dogs-but I love the Boxers most!
What is something that most people wouldn’t know about you?
I love heavy metal music.
Tell us about your pets?
Turk is a male rescue Boxer, age 4 and Roxy is a female rescue Boxer, age 2.
What would be your dream project?
To get human beings to be more loving toward pets.
What important message do people need to learn about animal rescue programs?
People need to know it’s not just about dogs and cats but all animals on Earth.
Favorite Quote to Live By/Mantra:
Love, Empathy, Respect are very important. I use these in all aspects of my Life….It takes nothing away from a human to be nice to an animal
Where were you born:
I was born in Dallas, TX
How long have lived in Dallas:
All my life
Neighborhood:
I grew up in Highland Park but now reside in Addison TX
Occupation:
President of Karma For Pets and Charity work with SPCA of Texas
Favorite Restaurant:
Cafe Pacific
Best Italian:
Antontio’s in Addison, TX
Best Sunday brunch:
Grand Lux at the Galleria
Best place for a power business meeting:
My home
If you have out of town guests, which hotel would you recommend?
Hotel ZaZa
Favorite shopping venue/boutique:
I enjoy shopping at the Mall and Stores such as; Neimans, BELK, Vintage Martini and Macy’s
Best Spa:
Grand Spa
Favorite Charity Event(s):
Fur Ball 2016, Mad Hatter’s Luncheon, Cancer Blows, FASHIONISTAS and DIFFA
Best Steakhouse:
Houston’s Restaurant
Best Pizza:
Fratelli’s
Best Lunch:
Rise
Best Gym/Athletic Facility:
I walk in my neighborhood with my Dogs
Best Limousine/Driving Service:
UBER
Best Museum/Exhibit:
Dallas Museum Art (DMA)
Describe your city in three words:
Dog Friendly – Fashionable – Southern
All-around favorite spot in Dallas:
Klyde Warren Park
Best Aspect of Dallas:
The People
How do you spend your downtime?
With my Husband & Dogs
What’s your favorite quote? “You get what you give.”
What’s your greatest accomplishment:
16 year marriage & my peace of mind!
EarthWater Founder & CEO Enters Local Politics
FEB 19, 2019
ADDISON, TX , February 19, 2019
EarthWater Founder and CEO, CJ Comu, announced today he is running for City Council in the City of Addison, Texas.
Addison, TX is a vibrant City in the heart of Dallas, TX. Supported by 15,000+ residents, an annual city budget of over $100M with a Net Asset Value of over $4.5B and, according to the FAA, one of the busiest private airports in the USA, Addison is an incredibly vibrant business and residential community. Addison is truly one of the best kept secrets in the Central United States.
EarthWater Founder and CEO, CJ Comu, stated why he was drawn to this civic duty. ”I have lived in Addison for over 20 years, I love this city and feel it’s time for me to give back. I will draw upon the strong leadership and management experience I’ve learned over the 30+ years running numerous private and public corporations. I’m used to hard work and will work tirelessly for the City of Addison. The role of City Council Member (requiring two nights a month) will not interfere with my responsibilities of building EarthWater and will bring an exciting addition to my normal 24-hour work day.”
When asked why CJ decided to run for City Council Office, his answer was simple,”I want to serve the Citizens of the City of Addison, TX by 1) Bringing new ideas for economic development & growth; 2) Attracting new corporations for relocation and residency; and, 3) Increasing city revenue to help reduce individual taxes.”
Mr. CJ Comu is a 25-year professional corporate veteran, creating, mentoring and operating numerous private and public companies as Chairman/CEO. He has extensive global knowledge and experience in building, funding and operating business ventures with a track record of over 100 companies he has counselled or served as Director.
Mr. Comu is Founder Chairman & CEO of EarthWater Limited, a manufacturer of health and wellness products sold in over 121 countries in partnership with Amazon.
Mr. Comu is Chairman of Regus Advisors, Inc.,
former Chairman/CEO of SUN Sports & Entertainment (a public company),
former Chairman/CEO of Humitech International (an international franchise company)
and former Chairman/CEO of Airtech International Group, (a public company)
and other entrepreneurial ventures.
Mr. Comu started his professional career in 1980 as Founding Partner of MBA Software Inc, one of Canada’s first Software Development Company’s for Apple Computer working with Steve Jobs.
Mr. Comu’s list of accomplishments and support include;
being former President of the Addison Rotary Foundation,
Former Vice Chairman of Galleria Credit Union,
Charter Member of Investin Forum,
Member of the North Texas Leadership Board of the American Diabetes Association,
Member of the City of Addison Economic Development Commission
and finally he was a Nominee for the Ernst & Young 2018 Entrepreneur of the Year Award.
Mr. Comu is a former speaker at Southern Methodist University (SMU) to the Business Graduate Program on Venture Finance and Business Strategies as well as a Mentor at the University of Texas at Dallas (UTD) Dallas MBA Program and Mentor at the Addison Treehouse in conjunction with the Dallas Entrepreneur Center (DEC).
He sits on several Boards and serves as a Mentor, Panelist and Keynote Speaker.
Mr. Comu has been on Television, Magazine, Radio, and a Keynote Speaker and Panelist on numerous events world-wide.
CJ and his wife Phyllis, a native of Dallas, Texas, have been married over 20 years.
She is an animal advocate with the SPCA.
They are proud parents of two rescue Boxer Dogs and continue to work with animal charities.
They are also supporters of Saint Michael & All Angels Episcopal Church and are 20-year Addison homeowners.
You can follow Mr. Comu on LinkedIn, Facebook, Instagram and Twitter (@cjcomu).
About CJ Comu
CJ Comu is an American Icon Entrepreneur with an extensive global business resume.
You can learn more by visiting www.cjcomu.com.
If you would like to book Mr. Comu for a speaking engagement, please contact his Campaign Manager at: 1911consulting@gmail.com.
About Addison TX
Addison, Texas, located in the heart of Dallas, is an ideal destination to live, work and play. Designed with entrepreneurial innovation and driven by community spirit, our unique 4.4 square mile urban enclave boasts 180+ restaurants, 22 hotels, upscale living, unique retail shops and more than 12 million square feet of office space
About EarthWater
EarthWater is a health and wellness company and manufacturer of mineral infused high-alkaline beverages and liquid concentrate with proprietary blends of natural organic trace minerals mined from deep within the earth’s surface.
These minerals are composed of ”Fulvic and Humic” and have rehydrating and detoxifying qualities that can inhibit free radicals and improve absorption of key nutrients
. EarthWater products are sold on www.earthwater.com.
”Follow,” “Like,” and “Share” our social media pages @earthwaterhq.
Please direct inquiries to info@earthwater.com or visit www.EarthWater.com.
SOURCE: EarthWater, PLC
UNITED STATES V. CENGIZ JAN COMU, ET AL.
PENDING CRIMINAL DIVISION CASES
Earthwater cases
United States v. Cengiz Jan Comu, et al.,
Court Docket No.: 3:19-cr-00112-K (N.D. Texas)
United States v. Beth Ellen Degroot
Court Docket No.: 3:19-cr-00521 (N.D. Texas)
United States v. Donald Andrew Rothman
Court Docket No.: 3:19-cr-00437 (N.D. Texas)
Court Assigned: These cases are assigned to U.S. District Judge Ed Kinkeade, U.S. District Court for the Northern District of Texas, U.S. Courthouse, 1100 Commerce Street, Room 1625, Dallas, TX 75242.
Unless otherwise noted in an update below, all court events will take place at this location.
Recent Updates:
Defendant Suzanne Aileen Gagnier entered an agreement to plead guilty on June 8, 2022 and rearraignment hearing is set for June 30, 2022 at 09:00 AM.
The sentencing hearing for defendants Comu, Kadish, Green, Price, and Rothman has been rescheduled to September 7, 2022 at 9:30 AM.
The sentencing hearing for defendant DeGroot has been scheduled for September 14, 2022 at 9:30 AM.
The sentencing hearing for defendant Barnes has been scheduled for September 28, 2022 at 9:30 AM.
The sentencing hearing for defendant Joe Edward Duchinsky is set for October 5, 2022 at 09:30 AM.
Defendant Daniel Thomas Broyles is scheduled to enter a plea of guilty on June 24, 2022 at 11:00 AM. The event will take place in Courtroom #1B, 401 W Trade St, Charlotte, NC 28202 before Magistrate Judge David S. Cayer.
The Jury trial for the remaining defendants who have not plead guilty is now set for October 3, 2022 at 9:00AM.
Please note that due to the on-going COVID-19 pandemic, courthouses may have different rules regarding in-person attendance. Please check the court’s website or contact us at Victimassistance.fraud@usdoj.gov if you are planning to attend.
In court unabashedly with a bankruptcy petition, when Thievin’ Texas Lawyer Chris Pettit should be in Shackles and Orange before a Federal Judge under Criminal Indictment. Allegedly he Stole Tens of Millions from clients. This is why Lawyers Trust Accounts need Externally Audited https://t.co/4kJniJp9xL pic.twitter.com/00lqkRtU4W
— lawsinusa (@lawsinusa) June 6, 2022
Prior Updates –
Defendant Joe Edward Duchinsky entered a guilty plea on June 14, 2022.
Defendant Barnes’s re-arraignment hearing was scheduled for June 7, 2022.
Defendant Barnes entered an agreement to plead guilty on April 01, 2022.
Defendant Duchinsky entered an agreement to plead guilty on April 20, 2022.
Defendant Duplain entered an agreement to plead guilty on May 5, 2022.
Defendant DeGroot pled guilty pursuant to a plea agreement on May 17, 2022.
On June 11, 2020, defendant Price pleaded guilty to one count of conspiracy to commit mail and wire fraud, ten counts of mail fraud, ten counts of wire fraud and one count of money laundering.
On March 10, 2020, defendant Comu pleaded guilty to one count of conspiracy to commit mail and wire fraud, ten counts of mail fraud, ten counts of wire fraud and two counts of money laundering.
On January 3, 2020, defendant Duplain pleaded not guilty to counts one through twenty-one of the superseding indictment.
On November 21, 2019, defendants Duchinsky, Filippo, and Gagnier pleaded not guilty to counts one through twenty-one of the superseding indictment. Defendant Duchinsky was arrested and appeared on November 6, 2019, in Santa Ana, California before U.S. Magistrate Judge Autumn D. Spaeth. Defendant Gagnier was arrested and appeared on November 7, 2019, in Los Angeles, California before U.S. Magistrate Judge Frederick F. Mumm. Defendant Filippo was arrested and appeared Thursday, November 7, 2019, in Oklahoma City, Oklahoma before U.S. Magistrate Judge Gary M. Purcell.
On November 19, 2019, defendant Green pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of mail fraud.
On October 31, 2019, defendant Donald Andrew Rothman pled guilty in a separate but related case (19cr437; N.D. Texas).
On September 10, 2019, defendant Kadish pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of mail fraud.
On May 9, 2019, defendant Barnes pleaded not guilty to counts one through twenty-one of the indictment.
On May 6, 2019, defendants Price and Barnes were arrested and appeared before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas.
Defendant Comu was arrested and appeared on Wednesday, May 8, 2019, also before Judge Toliver.
Defendant Kadish was arrested and appeared Wednesday, May 8, 2019, in Miami before U.S. Magistrate Judge Jacqueline Becerra of the Southern District of Florida.
Defendant Green was arrested and appeared Wednesday, May 8, 2019, in Fort Lauderdale before U.S. Magistrate Judge Lurana S. Snow of the Southern District of Florida.
Defendant Duplain was arrested and appeared on December 6, 2019, in Riverside, California before U.S. Magistrate Judge Sheri Pym.
Broyles made his initial appearance in federal court in Charlotte, North Carolina, on March 2, 2022 in another case after being extradited from Mexico to face charges related to his involvement in two high-yield investment fraud schemes.
Criminal Charges:
Cengiz Jan “CJ” Comu, 58, of Dallas, Texas; John Mervyn Price, 63, also of Dallas; Harley E. “Buddy” Barnes, III, 60, of Plano, Texas; Richard Laurence Kadish, 57, of Miami, Florida; Richard Lawrence Green, 69, also of Miami; and Daniel Thomas Broyles Sr., 61, formerly of Malibu, California, were charged in an indictment returned in the Northern District of Texas with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and 10 counts of wire fraud.
The indictment was unsealed on May 8, 2019. On October 9, 2019, the court unsealed a separate indictment – which was followed by a superseding indictment filed on March 4, 2020 – charging Beth Ellen Degroot and Barnes with one count of wire fraud and four counts of obstruction of an official proceeding.
The indictment alleges that, beginning in 2013, Comu, Price, Barnes, Kadish, Green and Broyles conspired to sell stock in EarthWater, a United Kingdom company headquartered in Dallas County, Texas.
EarthWater manufactured and sold bottled water that it claimed was infused with special minerals mined from an 80-million-year-old deposit hidden in a secret location.
According to the indictment, Comu, who is EarthWater’s founder, chairman and chief executive officer, falsely represented to victim investors that he was a successful Wall Street veteran with decades of experience and did not disclose to investors that, among other things, he was permanently barred from selling unregistered securities as a result of actions filed by state and federal securities regulators.
The indictment further alleges that, to induce victims to purchase EarthWater stock, Comu, Price, Barnes, Kadish, Green, Broyles, and others made numerous false and misleading representations, including that victim investors only had a brief opportunity to purchase EarthWater stock for anywhere from $.10 to $.50 per share in an unregistered offering before EarthWater launched an initial public offering (IPO) or was acquired by a large well-known company and EarthWater’s stock price would increase anywhere from 10- to 50- times the purchase price.
In reality, EarthWater allegedly never initiated an IPO, or a merger or acquisition.
The indictment also alleges that defendants falsely represented to victim investors that EarthWater would use 90 percent of invested funds to grow its business and expand operations, and that any fees paid to broker-dealers with respect to the sale of EarthWater stock would not exceed 10 percent of the purchase price of the shares.
In reality, Comu, Price and Barnes allegedly agreed to split victim investors’ funds 50-50 with Kadish, Green, Broyles and other individuals who sold EarthWater stock.
As a result, nearly half of all of the money victims invested in EarthWater allegedly went directly into the pockets of the individuals who sold them the stock.
In addition, according to the indictment, the defendants also falsely represented to victim investors that Comu, Price and Barnes did not receive salary from EarthWater in 2014, 2015 or 2016.
In reality, Comu, Price and Barnes allegedly used EarthWater’s investment account as a personal piggybank, using victim investor funds for their own personal benefit and transferring victim investor funds to bank accounts controlled by them for their own personal use.
Six men were charged in an indictment unsealed today for their alleged participation in a five-year high-yield investment fraud scheme.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Erin Nealy Cox of the Northern District of Texas and Inspector in Charge Delany DeLeon-Colón of the U.S. Postal Inspection Service’s Criminal Investigations Group in Washington, D.C., made the announcement.
Cengiz Jan “CJ” Comu, 58, of Dallas, Texas; John Mervyn Price, 63, also of Dallas; Harley E. “Buddy” Barnes, III, 60, of Plano, Texas; Richard Laurence Kadish, 57, of Miami, Florida; Richard Lawrence Green, 69, also of Miami; and Daniel Thomas Broyles Sr., 61, formerly of Malibu, California, were charged in an indictment returned in the Northern District of Texas with one count of conspiracy to commit mail and wire fraud, 10 counts of mail fraud and 10 counts of wire fraud. Price and Barnes were arrested and appeared Monday before U.S. Magistrate Judge Renee H. Toliver of the Northern District of Texas. Comu was arrested and appeared on Wednesday, also before Judge Toliver. Kadish was arrested and appeared Wednesday in Miami before U.S. Magistrate Judge Jacqueline Becerra of the Southern District of Florida. Kadish was arrested and appeared Wednesday in Fort Lauderdale before U.S. Magistrate Judge Lurana S. Snow of the Southern District of Florida. A trial date has not yet been set.
Broyles, who was previously indicted in the Western District of North Carolina for his role in another high-yield investment fraud scheme, also remains a fugitive.
“These individuals are charged with making multiple false and fraudulent representations as part of a five-year fraud scheme that ripped off investors, many of whom were elderly,” said Assistant Attorney General Benczkowski. “The indictment unsealed today underscores the Criminal Division’s commitment to combating high-yield investment fraud, which often targets and victimizes some of the most vulnerable members of our community.”
“The defendants peddled an absurd get-rich-quick scheme, deceiving hundreds of hardworking Americans,” said U.S. Attorney Erin Nealy Cox. “We will not stand for this type of blatant fraud.”
“Anyone who engages in deceptive securities practices needs to know they will not go undetected and will be held accountable,” said Inspector in Charge DeLeon-Colón. “The Postal Inspection Service has been investigating crimes like the ones alleged here for many years. Our duty is to protect investors and defend the integrity of the marketplace and the U.S. Mail.”
The indictment alleges that, beginning in 2013, Comu, Price, Barnes, Kadish, Green and Broyles conspired to sell stock in EarthWater, a United Kingdom company headquartered in Dallas County, Texas. EarthWater manufactured and sold bottled water that it claimed was infused with special minerals mined from an 80-million-year-old deposit hidden in a secret location.
According to the indictment, Comu, who is EarthWater’s founder, chairman and chief executive officer, falsely represented to victim investors that he was a successful Wall Street veteran with decades of experience and did not disclose to investors that, among other things, he was permanently barred from selling unregistered securities as a result of actions filed by state and federal securities regulators.
The indictment further alleges that, to induce victims to purchase EarthWater stock, Comu, Price, Barnes, Kadish, Green, Broyles, and others made numerous false and misleading representations, including that victim investors only had a brief opportunity to purchase EarthWater stock for anywhere from $.10 to $.50 per share in an unregistered offering before EarthWater launched an initial public offering (IPO) or was acquired by a large well-known company and EarthWater’s stock price would increase anywhere from 10- to 50- times the purchase price. In reality, EarthWater allegedly never initiated an IPO, or a merger or acquisition.
The indictment also alleges that defendants falsely represented to victim investors that EarthWater would use 90 percent of invested funds to grow its business and expand operations, and that any fees paid to broker-dealers with respect to the sale of EarthWater stock would not exceed 10 percent of the purchase price of the shares. In reality, Comu, Price and Barnes allegedly agreed to split victim investors’ funds 50-50 with Kadish, Green, Broyles and other individuals who sold EarthWater stock. As a result, nearly half of all of the money victims invested in EarthWater allegedly went directly into the pockets of the individuals who sold them the stock.
In addition, according to the indictment, the defendants also falsely represented to victim investors that Comu, Price and Barnes did not receive salary from EarthWater in 2014, 2015 or 2016. In reality, Comu, Price and Barnes allegedly used EarthWater’s investment account as a personal piggybank, using victim investor funds for their own personal benefit and transferring victim investor funds to bank accounts controlled by them for their own personal use.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the U.S. Postal Inspection Service. Trial Attorneys Christopher Fenton and William Bowne of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mary F. Walters of the Northern District of Texas are prosecuting the case.
The Criminal Division’s Fraud Section plays a pivotal role in the Department of Justice’s fight against white collar crime around the country.
Individuals who believe that they may be a victim in this case should visit the Fraud Section’s Victim Witness website for more information.
Victim Impact Statement:
If you would like to submit a Victim Impact Statement you may do so by mailing the Victim Impact Statement below to: Victim Witness Unit, U.S. Department of Justice, Criminal Division, Fraud Section, 10th & Constitution Avenue, NW, Bond Building, Room 4416, Washington, DC 20530.
You also may submit the Victim Impact Statement via email at Victimassistance.fraud@usdoj.gov or by fax at: (202) 514-3708.
Victim Impact Statement (PDF)
The information on this website will be updated as new developments arise in the case. If you have any questions, please call the Victim Assistance Line toll-free at (888) 549-3945 or email us at VictimAssistance.fraud@usdoj.gov.
Presumption of Innocence: It is important to keep in mind that an Indictment contains allegations only, and that defendants are presumed innocent until proven guilty. That presumption requires both the court and our office to take certain steps to ensure that justice is served.
Crime Victims’ Rights Act and Right to Retain Counsel:
The Crime Victims’ Rights Act (18 U.S.C. § 3771) applies only to victims of the counts charged in federal court, and thus individuals may not be able to exercise all of these rights if the crime of which the individual is a victim was not charged.
Section 377I(c)(2) of this Act requires that we advise you that you have the right to retain counsel. Although the statute specifically sets forth your right to seek advice of an attorney with regard to your rights under the statute, there is no requirement that you retain counsel.
The Government may not recommend any specific counsel, nor can the government (or the court) pay for counsel to represent you. Government attorneys represent the United States.
If you elect to obtain counsel to represent your interests, please have your attorney notify this office in writing at: U.S. Department of Justice, Criminal Division, Fraud Section, 10th & Constitution Avenue, NW, Bond Building, 4th Floor, Washington, DC 20530, Attention: Victim Witness Unit; fax: (202) 514-3708; or email: VictimAssistance.fraud@usdoj.gov.
If you elect not to retain counsel to represent your interests, you do not need to do anything.
Plea Agreements:
Please be aware that many criminal cases are resolved by plea agreement between the Department of Justice and the defendant. If you want to inform the prosecutor of your views regarding the plea agreement, or any other aspect of the case, please call the Victim Assistance Line toll-free at (888) 549-3945 or email us at VictimAssistance.fraud@usdoj.gov, and we will put you in touch with the prosecutor.
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