CEO of mergers and acquisition advisory firm pleads guilty to defrauding clients of over $2M

Press Release

ALEXANDRIA, Va. - An Arlington-based business owner pled guilty yesterday to wire fraud in connection with his scheme to defraud eight companies of over $2 million.

According to court documents, from at least January 2020 through December 2022, Kiel Brendan Brandt, 34, owned and operated Epsilon Acquisition Services, a mergers and acquisitions advisory firm. From at least February 2021 through December 2022, Brandt defrauded companies and individuals by lying about the status of deals and the state of Epsilon's finances, by falsely claiming that Epsilon would refund fees if deals did not close, and by falsely claiming that refunds had been or imminently would be issued.

When Brandt failed to secure funding and deals did not close, Brandt falsely claimed that the deals were delayed because the lenders and/or partners needed additional due diligence materials, insurance records, or other documentation.

For example, a client company in Argentina paid Epsilon approximately $275,000 in refundable payments and fees to find a buyer to purchase the company. Brandt never closed the deal, but rather than repaying the funds, he told the company that the bank was having payment processing issues, that there were delays in the money posting to the account, that the bank was unable to timely send the funds because of a bank holiday, and that the delays were because of technical complications in transferring funds overseas. To make his supposed efforts appear legitimate, Brandt initiated a transfer from his bank and obtained a confirmation order, but he then canceled the transfer before any of the money was sent from his account. Brandt, nonetheless, sent the confirmation number to the company.

Brandt further obfuscated the scheme by suggesting there had been an internal miscommunication at Epsilon with an employee named "Steph" regarding from which account the transfer should be initiated. In truth, "Steph" was a fictitious employee who did not exist. Brandt also suggested that the company could help facilitate the transfer of funds by opening a U.S. bank account. When that did not result in a refund payment, Brandt communicated that he would open a bank account in Central America from which he would make payment. Approximately a year-and-a-half after the company first sought repayment of its funds, Brandt signed and executed a contract acknowledging that Epsilon had failed to return money held in escrow as well as other refundable fees. Brandt again falsely promised to repay a portion of the $225,000 that he owed the company by September 9, 2022, but did not send any money.

In September 2021, another company agreed to provide Epsilon with a $1 million bridge loan to facilitate transactions for the company. In the loan agreement, Brandt falsely represented Epsilon's debts, hiding that Epsilon owed hundreds of thousands of dollars to other victims. Rather than using the funds for their intended purpose, Brandt directed over $700,000 in repayments to other clients to whom he owed money and used the remaining funds primarily for transfers to employees and payments to personal accounts.

Brandt also solicited upfront fees by various names including "good faith deposits," "loan commitment fees," "insurance fees," and "prepayments of commissions." As with the bridge loan, however, rather than directing the funds towards their intended uses, Brandt directed payments to Epsilon's operating expenses, and made sizeable payments to his personal bank accounts. Brandt also used payments from victims to pay other victims and clients.

In total, Brandt defrauded eight companies of $2,002,750 and he repaid the victims only $193,323. Epsilon also failed to repay $175,000 in advances to a ninth company. In his plea agreement, Brandt agrees to pay $1,984,426 in total restitution.

Brandt is scheduled to be sentenced on April 3, 2025, and faces up to 20 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Sean Ryan, Special Agent in Charge of the FBI Washington Field Office's Criminal and Cyber Division, made the announcement after U.S. District Judge Patricia Tolliver Giles accepted the plea.

Assistant U.S. Attorneys Jack A. Morgan and Kenneth R. Simon Jr. are prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney's Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:24-cr-250.

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Updated December 18, 2024