FBI arrests 'jockey' in $2.5m fraud

AN AUSTRALIAN man who claimed to be a former champion jockey has been arrested in the United States and charged with a $2.5 million fraud.

By InvestSMART · 16 Oct 2011

By InvestSMART ·
16 Oct 2011

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AN AUSTRALIAN man who claimed to be a former champion jockey has been arrested in the United States and charged with a $2.5 million fraud.

Christopher James Woods, 52, was arrested by the FBI in Greenwich, Connecticut, and extradited to Los Angeles where he appeared in the US District Court.

In an affidavit to the court, FBI Special Agent Ty Thomas said Mr Woods (pictured) had used some of the money to pay $1 million off his American Express card. It is alleged the card was used to buy luxury goods, food, travel and entertainment.

The Sun-Herald has learnt that Chris Woods, as he is generally known, has for more than 30 years told people in Australia and overseas that he was a successful jockey and he had inside information on horse races.

In the early 1980s he told the Double Bay restaurant owner Tony Eustace there was a "sure thing" running at Murray Bridge in South Australia.

Mr Eustace, who was murdered in 1985 during the Sydney gang wars, gave $10,000 in cash to a friend called Frank Webb, who went to the race track where he met Mr Woods.

Mr Webb told The-Sun Herald last week he became suspicious when three other punters turned up, each with $10,000, to put on the "sure thing" at odds of about 4-1.

He said he declined to put Mr Eustace's money on the horse but the other punters went ahead. The horse did not win.

Mr Webb said he had had nothing to do with Mr Woods since then.

Special Agent Thomas's affidavit states that in mid-2007, Mr Woods's alleged co-conspirators, Henrik and Hamlet Sardariani, told the manager of a company called Bith, LLC, they were buying a hospital in Los Angeles County and needed $2.5 million to be placed into a secure account for 30 days.

Then, $1.9 million was transferred to Mr Woods's US bank account. The court heard more than $1 million was used to pay off Mr Woods's Amex card.

An FBI spokeswoman said Mr Woods had been arrested on August 23. He is due to reappear in court later this month.

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Frequently Asked Questions about this Article…

What happened in the $2.5 million fraud case involving Christopher James Woods?

Christopher James Woods, a 52-year-old Australian who claimed to be a former champion jockey, was arrested by the FBI in Greenwich, Connecticut and extradited to Los Angeles. He has been charged in connection with an alleged $2.5 million fraud and appeared in US District Court. An affidavit by FBI Special Agent Ty Thomas sets out the allegations against him.

How much money was allegedly transferred and how was it used in the case?

According to the court affidavit, about $1.9 million was transferred into Woods’s US bank account. The filing says more than $1 million of that was used to pay off his American Express card, and the card was allegedly used for luxury goods, food, travel and entertainment.

Who else is named in the affidavit and what company was involved in the alleged scheme?

The affidavit names alleged co-conspirators Henrik and Hamlet Sardariani. It says they told the manager of a company called Bith, LLC that they were buying a hospital in Los Angeles County and needed $2.5 million to be placed into a secure account for 30 days.

What claims did Woods reportedly make about his background and horse racing information?

For more than 30 years, Woods — generally known as Chris Woods — reportedly told people in Australia and overseas that he was a successful jockey and that he had inside information on horse races. The article also recounts an early-1980s episode where he touted a 'sure thing' at Murray Bridge in South Australia.

When was Woods arrested and what is his court timetable?

An FBI spokeswoman said Woods was arrested on August 23. He was extradited to Los Angeles and appeared in US District Court; the article notes he is due to reappear in court later this month.

How did the alleged hospital purchase play into the $2.5 million transfer?

The affidavit states that in mid-2007 the Sardarianis told the manager of Bith, LLC they needed $2.5 million placed into a secure account for 30 days as part of buying a Los Angeles County hospital. Shortly afterwards, roughly $1.9 million was transferred into Woods’s US bank account, according to the court filing.

What specific spending did investigators cite as evidence in the fraud case?

FBI Special Agent Ty Thomas’s affidavit alleges that more than $1 million of the transferred funds was used to pay off Woods’s American Express card. The card charges cited include luxury goods, food, travel and entertainment.

What warning signs in this case might everyday investors recognise when evaluating opportunities?

The article highlights several red flags that appeared in this matter: promises of a 'sure thing' or insider tips, requests to place large sums into a short-term 'secure' account, large transfers going into an individual’s bank account rather than an escrow or corporate account, and inconsistent or unverifiable claims about credentials. These are the kinds of issues that prompted the FBI affidavit in this case.