George Tannous, a former IRS agent has been given a three year prison sentence for his part in an investment scheme that conned victims of more than $8 million. Tannous entered a guilty plea in 2008 after his firm, Bidbay.com helped bilk money from investors. His guilty plea is for 1 count of conspiracy and 1 count of subscription to a false tax return.
Tannous will serve his sentence in federal prison. The sentence was handed down by US District Judge Dean D.Pregerson. The judge has also ordered Tannous to pay up the $8.8 million to the 218 investors he has cheated. Tannous is also guilty of concealing material facts in connection to the sale of investments in Bodbay.com Inc, AskGT.com Inc. and a few other companies.
George Tannous is from Lake View Terrace. Tannous served in the IRS till he left in 1993. He started a tax consulting company and then went into Bidbay. Tannous was president of the company which was in the process of developing an online auction website. The investors were cheated after they had been asked to invest in unregistered shares of Bidbay between 1999 and 2003. They had been led to believe that the company was in the process of being acquired by ebay Inc and this would lead their share prices to go up significantly. Ebay had no plans of doing so of course.
The investors also were not told about the fact that half their money was going as commissions to be paid to telemarketers whose job was to solicit investments. Tannous also conveniently omitted telling the investors that their money was helping fund his personal life styles too. He used $3 million for personal income, income which he failed to report in his income tax filings.
Adding to his list of crimes, Tannous also did not tell the investors that his co- conspirator in the crime, a De Elroy Beeler Jr, is a convicted felon who was awaiting sentence on fraud charges of another case and had served jail time between 2002 and 2005. Tannous had worked out this scheme with three co- conspirators.