Press Release
OPERATION WATERFALL RECOVERS $1,863,264.85 FOR SOUTH FLORIDA FRAUD VICTIMS
February 25, 2008
FOR IMMEDIATE RELEASE
R. Alexander Acosta, United States Attorney for the Southern District of Florida, Bill Roderick, Deputy Inspector General of the U.S. Environmental Protection Agency, and Henry Gutierrez, Inspector in Charge, United States Postal Inspection Service, announced that James Basi and All County Water Association, Inc. ( f/k/a Tri County Water Association, Broward County Water Association) were ordered to pay $1,863,264.85 in compensation to more than five hundred victims of their fraudulent scheme to sell unnecessary water treatment systems to area residents by falsely claiming that local water supplies were injurious to their health. The restitution was ordered by United States District Court Judge James I. Cohn, after a hearing on January 21, 2007 in Fort Lauderdale.
On December 14, 2007, Judge Cohn had sentenced the defendants for their respective roles in the fraud. All County Water Association, Inc. (ACWA), of Hollywood, was convicted of conspiracy to commit mail and wire fraud and was sentenced to 60 months of probation, and a $500,000 fine. James Basi, the President of ACWA, was convicted of conspiracy to commit mail and wire fraud, mail fraud, wire fraud, and misuse of a government seal. He was sentenced to 41 months in federal prison, followed by 36 months of supervised release, and ordered to pay a $25,000 fine. Lou Banos, a salesman, was convicted of misuse of a government seal and sentenced to 60 months of probation.
According to statements made in court and court documents, from May 2002 until July 2007, ACWA, Basi, and Banos falsely advised residents of South Florida that their drinking water was harmful to their health, and potentially life threatening. They then sold, financed, installed, and maintained unnecessary water treatment systems to the victims, employing deceptive sales practices for personal profit. The defendants falsely claimed that the treatment systems were capable of removing contaminants, carcinogens, and toxins, including e-coli and anthrax. ACWA also used the EPA seal on some of their marketing materials and represented to the victims that the equipment was “EPA Approved” when it was not. Approximately 3,000 people fell victim to this scheme.
Mr. Acosta commended the coordinated investigative efforts of the Special Agents of the United States Environmental Protection Agency, Office of Inspector General and the Inspectors of the United States Postal Service, which brought the matter to a successful conclusion. This case was prosecuted by Assistant United States Attorneys Norman O. Hemming, III, Diane Patrick, and Thomas Watts-FitzGerald.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
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