Newport Beach Fugitive Captured in Malaysia on Fraud Charges

A former Newport Beach resident who fled the country in 1999 after federal authorities executed a search warrant at his allegedly fraudulent Internet company arrived back in the United States today to face criminal charges, the FBI reported.           

James S. Eberhart, 71, landed at Los Angeles International Airport this morning and is expected to make his first court appearance this afternoon in United States District Court in Los Angeles. The FBI had actively been seeking information from the public on its website about Eberhart and received a tip that he was in Malaysia.

Malaysia deported Eberhart because his United States passport had expired. A 2002 grand jury indictment alleges that Eberhart and another man -- Eugene M. Carriere -- operated a fraudulent Newport Beach company called YES Entertainment Network, Inc. Eberhart is specifically charged with 11 counts of mail fraud and 9 counts of money laundering. Using telemarketers at outside firms and written promotional materials, Eberhart and Carriere solicited investors by claiming that YES was creating and maintaining an 18-channel, multimedia, family-oriented website.

According to the FBI, prospective investors were told that YES would generate profits through the sale of advertising on the website. Between February 1999 and October 1999, Carriere and Eberhart allegedly raised nearly $14 million in investor funds through a network of nearly two dozen telemarketing “boiler rooms” across the United States and Canada. Once YES received money from investors, 45 percent of those funds were given to the outside telemarketers as a sales commission, according to the indictment, which goes on to allege that the remaining investor funds primarily went to Carriere and Eberhart.                     

Carriere, 63, was a fugitive for six years before being arrested in Thailand in April 2005 and pleading guilty to two counts of mail fraud in 2007. He was sentenced to three years in federal prison and ordered to pay $12,838,045 in restitution.

In addition, five other defendants, including the owners of telemarketing operations used by YES, were indicted, pleaded guilty and were sentenced to as much as 142 months in federal prison.