Two Davis Men Sentenced for Defrauding Federal Agency

Two Davis men will serve time in prison after participating in a fraudulent scheme to make millions of dollars off a government agency.

The scheme involved investment in a milling and bakery facility in the European country of Estonia.

Tapani Koivunen, 54, will serve two years in prison for conspiracy to commit mail and wire fraud and conspiracy to commit money laundering. Sergei Shkurkin, 57, will serve one year for conspiracy to commit mail and wire fraud.

They, along with Donald Daniels and Martin William Washburn of Morgan Hill, have been ordered to pay more than $2 million in restitution.

“The defendants admitted that from 2003 to 2005, they agreed to participate in a fraudulent scheme to defraud the Overseas Private Investment Corporation (OPIC),” according to an FBI release.

In doing so, they received a loan of about $9.4 million to fund the milling and bakery project in Estonia. The mission of OPIC is to encourage US companies to invest in overseas business projects.

The men gave falsified invoices that contained inflated equipment prices, withheld bank statements that would have revealed that the cash equity was immediately returned to Daniels, lied to OPIC about the progress of the project and affirmed and reaffirmed the truthfulness of their disclosures to OPIC.

The amount spent on the bakery project was, according to the FBI, far less than what they reported to OPIC. In addition, a transaction to purchase equipment was actually revealed to be a transaction between parties aimed at hiding the fact that the money “invested in the project” had actually been returned to Daniels.