Serial Fraudster Extradited to the United States from Mexico to Face Investment Fraud Scheme Charges in North Carolina and Texas | OPA

Dayana Jones

A California man made his initial appearance in federal court in Charlotte, North Carolina, today after being extradited from Mexico to face charges related to his involvement in two high-yield investment fraud schemes. 

According to court documents, Daniel Thomas Broyles Sr., aka Dan Thomas, 64, of Malibu, is charged in an indictment returned in the Western District of North Carolina for a high-yield investment fraud scheme involving a sham company named Niyato Industries Inc. Broyles allegedly conspired with Niyato’s CEO, Robert Leslie Stencil, 65, of Charlotte, North Carolina, and others to fraudulently sell stock in Niyato. Together, Broyles, Stencil and others falsely portrayed Niyato as a leader in its field, manufacturing electric vehicles and converting gasoline vehicles to run on compressed natural gas. Broyles, Stencil and their co-conspirators allegedly told victims that Niyato was run by a team of high-profile executives, and that Niyato had patented technology, state-of-the-art facilities and valuable contracts. Further, they allegedly told victims that Niyato would use 97% of the money it raised selling stock to grow its business, expand its operations and prepare for an imminent initial public offering (IPO). In reality, as alleged in the indictment, Niyato had no patents, facilities, products or plans to commence an IPO, and Niyato’s true business was the sale of worthless stock. Broyles, Stencil and their co-conspirators allegedly used nearly all of the money raised by selling Niyato stock for their own personal benefit, with Stencil paying salespeople – like Broyles – half or nearly half of the money they solicited from each investor on behalf of Niyato. 

Broyles is charged with one count of conspiracy to commit mail fraud and wire fraud, 14 counts of mail fraud, 14 counts of wire fraud, and five counts of money laundering. The defendant made his initial court appearance today before U.S. Magistrate Judge David S. Cayer of the U.S. District Court for the Western District of North Carolina. If convicted, Broyles faces up to 30 years in prison on the conspiracy charge, up to 20 years in prison on each count of mail fraud, up to 20 years in prison on each count of wire fraud, and up to 10 years in prison on each count of money laundering. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. Stencil was convicted following a jury trial and sentenced to 135 months in prison.

Broyles is also charged in an indictment returned in the Northern District of Texas for his role in a second high-yield investment fraud scheme involving a company named EarthWater. According to the indictment, Broyles allegedly conspired with EarthWater’s CEO, Cengiz Jan Comu, 61, of Dallas, Texas, and others to sell EarthWater stock by making numerous false and misleading representations, including that victim investors only had a brief opportunity to purchase EarthWater stock in an unregistered offering before EarthWater’s stock price increased by 10- to 50-fold following an IPO or acquisition by a large well-known company. In reality, as alleged in the indictment, EarthWater never initiated an IPO nor a merger or acquisition. Moreover, Broyles, Comu and others falsely represented to victim investors that EarthWater would use 90% 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% of the purchase price of the shares. In reality, as alleged in the indictment, Comu agreed to split victim investors’ funds 50-50 with Broyles and others who sold EarthWater stock. As a result, nearly half of all of the money victims invested in EarthWater went directly into the pockets of the individuals who sold them the stock. 

Under the Northern District of Texas indictment, Broyles is charged with one count of conspiracy to commit mail fraud and wire fraud. If convicted, Broyles faces up to 30 years in prison. Comu pleaded guilty in 2020 and is awaiting sentencing.

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 Fiscalía General de la República (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. Assistant U.S. Attorney Mary Walters of the U.S. Attorney’s Office for the Northern District of Texas is also prosecuting the case involving EarthWater.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

https://www.justice.gov/opa/pr/serial-fraudster-extradited-united-states-mexico-face-investment-fraud-scheme-charges-north

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