Alan Safahi. Photo from his LinkedIn profile.

Alan Safahi charged in connection with alleged bank and wire fraud scheme

SAN FRANCISCO – A federal grand jury indicted Alan Safahi on charges related to an alleged bank fraud scheme, announced United States Attorney David L. Anderson and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Kareem Carter.

Safahi. June 1, 2013 photo from his Facebook page.

The indictment alleges that between June 2013 and September 2014, Safahi, 58, of Orinda, Calif., fraudulently entered into an agreement with a bank by which the bank was to be a backer for prepaid charge cards.  According to the agreement, Safahi’s company, Card Express, would issue and service the charge cards.  Further, the agreement required Card Express to fund 100% of the value of the cards and to turn over to the bank the total amount that the cards were supposed to be worth.  Instead of complying with the agreement, Safahi allegedly directed the employees of Card Express to maintain two sets of books.  One set of books maintained by Card Express was accessible to the cardholders and accurately reported the total amount for which the prepaid charge card was purchased, as well as the balance after any purchases.  The second set of books, however, was provided to the bank and fraudulently stated that the amount the cardholder spent on the day the card was used was the total value of the prepaid card.  Thus, Safahi caused the bank to believe the sponsored cards had much lower balances overall than they actually did have.

According to his LinkedIn profile, Safahi is also CEO and founder of ZED Network, a financial services company based in Ontario, Canada. An online search shows Card Express was based in Irvine, CA and was listed as a government contractor. A call to the company number was unsuccessful because it is disconnected.

The indictment further alleges Safahi fraudulently diverted funds that should have been turned over to the bank, i.e., the difference between the value of the cards and the amount Card Express reported to the bank was prepaid for the cards.  Safahi allegedly used some of the diverted funds to fund Card Express.  Safahi allegedly used other diverted funds to maintain his personal lifestyle, including by purchasing his home.  According to the indictment, on or about September 24, 2014, Safahi no longer was able to maintain sufficient cash flow to conceal his fraud and reported the true overall balance of the prepaid charge cards to the bank.  After reporting the true balance of the cards to the bank, Safahi promptly shut down Card Express, causing the bank and its customers to lose money.  According to the indictment, the overall balance of the charge cards Safahi reported to the banks on September 24, 2014, was approximately $2,735,531.27 larger than previously reported.

In sum, the indictment charges Safahi with bank fraud, in violation of 18 U.S.C. § 1344, four counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of money laundering, in violation of 18 U.S.C. § 1957.  Safahi made his initial appearance today and was released on a $250,000 bond.  The defendant was ordered to appear on September 13, 2019, at 11:00 a.m. before the Honorable Susan Illston for a status and trial setting conference.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the defendant faces a maximum sentence of 30 years in prison and a maximum $1,000,000 fine on each count of bank and wire fraud.  If convicted of money laundering, the defendant faces a maximum sentence of 10 years in prison and a maximum $250,000 fine.  In addition, the court also may order an additional term of supervised release, fines or other assessments, and restitution, if appropriate.  However, any sentence following conviction would be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Robert David Rees is prosecuting this case with the assistance of Kathy Tat.  This prosecution is the result of an investigation by the Internal Revenue Service. Criminal Investigations.

Allen Payton contributed to this report.

By Lafayette Police Department

On April 30, 2019, at approximately 3:12 p.m., Lafayette Police Officers were dispatched to a report of a robbery that had just occurred at the Bank of America. Additional information was received that one of the suspects had stated he had a gun.

As Officers were responding, they received information that the suspects were fleeing the scene in a black, four-door sedan and a citizen had provided a license plate number for the vehicle.

When Officers arrived on scene, they determined that no crime had occurred at the Bank of America, but instead at Peet’s Coffee. Officers learned that four suspects drove into the Plaza Shopping Center on Mt. Diablo Blvd., where two of the suspects exited the vehicle, and entered Peet’s Coffee shop. The two suspects each stole a laptop from patrons that were sitting inside and ran to the waiting Saturn sedan.

Two local students were eating in a nearby business and observed the suspects running out of Peet’s with the laptops. They ran out to provide aid and saw the suspect vehicle driving away. Believing a robbery had just occurred, one of the students ran after the vehicle. While the suspect vehicle was stopped in traffic, the student began taking pictures with his cell phone. One of the suspects saw him and yelled out that he had a gun and would shoot him. The student safely backed away and called 911 to report his actions. Lafayette PD will not be releasing the student’s identity.

With the information provided, Officers were able to use city-owned cameras to locate the vehicle and obtain images of the occupants. Lafayette Detectives were able to identify of all the occupants with assistance from Oakland Police. Detectives learned that the registered owner of the vehicle, along with two of the passengers, had active arrest warrants for prior, similar crimes in the City of Berkeley.

By 8:00 p.m., Oakland Police were able to locate the vehicle and detain two of the suspects. Lafayette and Berkeley Police Detectives responded to Oakland and arrested the two suspects. Lafayette Detectives are working with Berkeley Detectives and the investigation is currently active; with two suspects still outstanding. The suspects are not being identified at this time.

By Jimmy Lee, Director of Public Affairs, Contra Costa County Office of the Sheriff.

The Orinda Police Department, assisted by the Oakland Police Department, arrested 49-year-old Duane Makela of Oakland Tuesday morning, April 23 in connection with two bank robberies that occurred in the city of Orinda last year.

During the joint investigation with the Federal Bureau of Investigation, Makela was identified as the suspect. Detectives obtained an arrest warrant for Makela and a search warrant for his home. Makela was arrested at about 6:55 AM on the 3600 block of Broadway in Oakland without incident.

Makela’s vehicle was also searched. A possible explosive device was located in his car; the device was rendered safe.

Makela was later booked into the Martinez Detention Facility on robbery and drug possession charges. He is being held in lieu of $150,000 bail.

Anyone with any information on this case is asked to contact the Orinda Police Department at (925) 254-6820. For any tips, call 866-846-3592 to leave an anonymous voice message or email: tips@so.cccounty.us.