White Collar Criminal Defense Group

Shah-Exposed: From the Glamorous Life to Life Behind Bars

Real Housewives of Salt Lake City star Jen Shah was sentenced to 78 months in prison on January 6, 2023, in the Southern District of New York on charges of masterminding a wire fraud scam from 2012-2021, that targeted thousands of elderly citizens, while living a life of immense wealth and celebrity. Ms. Shah initially pled not guilty and was headed to trial proclaiming her innocence on social media and the show. However, Ms. Shah had a change of heart shortly before the trial was set to begin and pled guilty citing the government’s abundance of evidence against her. She further has stated that being confronted with their overwhelming evidence “finally woke her up.” Her defense attorney Priya Chaudhry stated to Judge Stein that “Ms. Shah was lost for months in an echo chamber of her own denial” but that “she found herself staring at her truth and the depth of her wrongs and she hurt them, and they were real and there was no more lying.”

Shah’s defense requested a sentence of 36 months incarceration while the Government argued in their sentencing memorandum for a sentence of 120 months incarceration. Government prosecutors indicated that Shah mocked the victims and suggested that any remorse was an extension of her acting. They supported their contentions by detailing the public offensive Ms. Shah went on after the indictment, including continually proclaiming her innocence on her television show as well as her attempts to profit off the charges by selling “Justice for Jen” merchandise.

There was a total of twenty-nine other individuals indicted as co-conspirators to Ms. Shah, including her longtime friend and assistant Stuart Smith. Mr. Smith along with other co-conspirators became cooperating witnesses for the government. Based upon this cooperation, the government was able to focus in and establish that Ms. Shah was the boss and mastermind behind the fraud. The following is a list of the defendants, grouped based upon an assessment of culpability by the Government, and sentence imposed:

Tier A

Jennifer Shah – sentenced to 78 months’ imprisonment

Carl Morris – sentenced to 78 months’ imprisonment

Cameron Brewster

Kevin Handren

Ryan Hult – sentenced to 60 months’ imprisonment

Stuart Smith

Tier 1

Arash Ketabchi – sentenced to 87 months’ imprisonment

Christopher Wilson – sentenced to 78 months’ imprisonment

Jason Sager* – sentenced to 12 months’ imprisonment

Joseph Minetto Chad Allen – sentenced to 48 months’ imprisonment

Shane Hanna

Anthony Cheedie

Joseph Ciaccio – sentenced to time served

Tier 2

Joseph McGowan – sentenced to 72 months’ imprisonment

William Sinclair* – sentenced to 15 months’ imprisonment

Peter DiQuarto* – sentenced to six months’ home confinement

Michael Finocchiaro* – sentenced to 15 months’ imprisonment

Raymond Quiles

Tier 3

Jack Kavner – sentenced to 51 months’ imprisonment

Daniel Quirk* – sentenced to 366 days’ imprisonment

Derrek Larkin – sentenced to 72 months’ imprisonment

Anthony Medeiros – sentenced to 66 months’ imprisonment

Brooke Marcus

Andrew Owimrin – sentenced to 52 months’ imprisonment

Joseph DePaola – sentenced to 30 months’ imprisonment

Tier 4

Shahram Ketabchi – sentenced to four months’ imprisonment

Thomas O’Reilly – sentenced to 366 days’ imprisonment

Mattie Cirilo – sentenced to 12 months’ home confinement

*These Defendants received the benefit of a motion pursuant to U.S.S.G. sec. 5k1.1

This is not the first Bravo franchise star to faceoff with the Government in the court room, Teresa Giudice (Real Housewives of New Jersey) and LuAnn de Lesseps (Real Housewives of New York) have also been convicted of criminal offenses.

Article authored and contributed to by Lee K. Goldfarb and Heidi J. Bondiskey.

A House of Cards Falls Down

Takeaway: Ignorance was not bliss for Samuel Bankman-Fried. The young cryptocurrency entrepreneur faces 8 charges in the Southern District of New York for allegations that his company, FTX, mishandled millions of dollars of its investors money.

Samuel Bankman-Fried’s “house of cards” played its final hand on Tuesday, December 13, 2022, as a federal grand jury in Manhattan returned an indictment against him. Fried is charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations. The grand jury handed down the indictment amidst allegations that Fried mislead investors out of approximately $1.8 billion.

In 2019, Fried founded FTX, a cryptocurrency exchange, when he was 27 years old. By 2022 it had a $32 billion valuation and was backed by investors and celebrities alike. FTX’s demise, ironically, was nearly as rapid as its ascent. In less than a week, Fried went from being portrayed in the media as the ‘white knight’ of cryptocurrency, to a disgraced former CEO. FTX’s swift downfall comes as no surprise, however, as Fried admittedly had no Board of Directors and was reportedly blissfully ignorant of his duties as CEO. According to the SEC Complaint, “FTX customers deposited billions of dollars into Alameda[1]-owned bank accounts, which Alameda spent on Its own trading operations and to expand Bankman-Fried’s empire.”

Despite being at the center of a heavily regulated space, i.e., cryptocurrency, it is alleged that Fried was able to assuage sophisticated investors that FTX was the premier cryptocurrency domain. Fried was over funded and under educated in the cryptocurrency space. While his public apologetic stance is refreshing, the full effects of his reported lack of concern for compliance remains to be seen. In an interview with the New York Times on November 30, 2022, after stepping down as FTX’s CEO, Fried maintained that he never intended to defraud his customers, and that he did not ‘intentionally co-mingle’ funds.

SEC Chair Gary Gensler stated that Fried “built a house of cards on a foundation of deception while telling investors that it  was one of the safest buildings in crypto.” Fried is being prosecuted criminally by the Southern District of New York. He is also being sued and investigated civilly by a number of federal agencies.  

Fried’s empire allegedly includes tens of millions of dollars of real estate in the Bahamas, political favor bought with customer funds, private jet excursions, a Super Bowl ad, and a sports stadium sponsorship. Fried’s pocket was limitless. Until it wasn’t.

Pietragallo Gordon Alfano Bosick & Raspanti, LLP has a robust white-collar practice that includes involvement at all stages of a criminal or civil investigation. Our attorneys have decades of experience advising companies of their regulatory and compliance duties, as well as defending individuals and companies against criminal allegations. Our attorneys are equipped to handle complex cases across the United States. For more information on our team and specific practice areas, visit our website here.  

The SEC Complaint can be viewed here.

[1] Alameda was originally founded in October 2017 and was utilized for over-the-counter trading services and to make and manage debt and equity investments.