NEWS RELEASE
UNITED STATES ATTORNEY'S OFFICE
WESTERN DISTRICT OF VIRGINIA

John L. Brownlee
United States Attorney
Heidi Coy
Public Affairs Specialist BB&T Building
310 1st Street, S.W., Room 906
Roanoke, Virginia 24011
(540) 857-2250
FAX (540) 857-2180

February 28, 2007

NINE INDICTED FOR SECURITIES FRAUD

United States Attorney John L. Brownlee announced today that Shinder Gangar, age 45, Alan White, age 48, Mark Smyth, Gregory Smyth, age 56, Kenneth Mason, Birgit “Gitte” Mechlenburg, Michael Hardesty, Mary Dowdell, age 49, and Rebecca Dowdell, age 30, were indicted by a federal Grand Jury sitting in Charlottesville, Virginia.

In Count One, SHINDER S. GANGAR, ALAN WHITE, KENNETH MASON, BIRGIT “GITTE” MECHLENBURG and MICHAEL HARDESTY were charged with securities fraud. In Count Two, SHINDER S. GANGAR, ALAN WHITE, KENNETH MASON, BIRGIT “GITTE” MECHLENBURG, and MICHAEL HARDESTY, were charged with conspiring to commit mail fraud. In Count Three, SHINDER S. GANGAR, ALAN WHITE, GREGORY SMYTH, MARK SMYTH, MARY DOWDELL and REBECCA DOWDELL, were charged with conspiring to commit mail fraud.

These charges arose out of an investigation into an international investment scheme headed by Terry L. Dowdell, formerly of Charlottesville, Virginia. Dowdell pleaded guilty to securities fraud and wire fraud charges in June of 2004, and is currently serving a fifteen year term of imprisonment on related charges.

According to the indictment, the defendants named above conspired with Terry L. Dowdell to sell fraudulent investment contracts. As part of the scheme, in April 1998, Dowdell began marketing a purported investment program that involved the trading of short and medium term debentures through Vavasseur Corporation. Vavasseur Corporation was a Bahamian corporation controlled by Dowdell that he established in April 1998 as an investment firm.

According to the indictment, Dowdell and the co-conspirators named in this indictment would project a gross return to investors of at least 4 percent each week for a minimum of 40 weeks. The investment contracts falsely represented that all commissions to Vavasseur would be paid only from trading profits generated by Vavasseur’s trading activity. Contrary to what was represented in the Vavasseur contracts, investors’ funds were not transferred into trading accounts and the funds were not used to buy and sell debentures.

When money was received from investors, the conspirators would send a false confirmation to investors that their money had been deposited in accounts in the Bahamas, when in fact funds were pooled together and held in accounts by Dowdell or the defendants.

The conspirators would also make monthly payments to investors, and falsely represent those payments as “profits” from Vavasseur’s trading activities, when in fact the funds were actually taken from a pool of investor funds held in accounts controlled by Dowdell, or Shinder S. Gangar and Alan White.

Between April 1998 and April 2002, the defendants raised at least $50 million from more than 50 investors in the United States and abroad.

If convicted on all counts, the maximum penalty faced by Shinder Gangar is twenty years and a $1,500,000 fine; by Alan White, twenty years and a $1,500,000 fine; by Mark Smyth, five years and a $250,000 fine; by Gregory Smyth five years and a $250,000 fine; by Kenneth Mason, fifteen years and a $1,250,000 fine; by Birgit “Gitte” Mechlenburg,fifteen years and a $1,250,000 fine; by Mary Dowdell, five years and a $250,000 fine; by Rebecca Dowdell, five years and a $250,000 fine; and by Michael Hardesty, fifteen years and a $1,250,000 fine.

The investigation of the case was conducted by Special Agent Jim Lamb for the Federal Bureau of Investigation. Assistant United States Attorney Jean B. Hudson and William F. Gould will prosecute the case.

A Grand Jury indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.