Case 1:05-cr-00340 Document 143 Filed 02/04/2008 Page 1 of 3

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

UNITED STATES OF AMERICA )

) No. 05 CR 340-9
v. ) Judge Blanche M. Manning
)
)
CHRISTINE FAVARA )

GOVERNMENT’S MOTION TO REVOKE BOND

The UNITED STATES OF AMERICA, by PATRICK A. FITZGERALD, United States

Attorney for the Northern District of Illinois, moves this Court pursuant to 18 U.S.C. §3142 to

revoke the bond and terminate the pretrial release of defendant Christine Favara. In support thereof

the government states as follows:

1. On April 7, 2005, defendant Christine Favara was charged in the present case along

with eight other individuals and two corporations in a twenty-three count indictment that charges

mail, wire and securities fraud, obstruction of justice, and contempt of court. R. 1. Favara is

charged with wire fraud in Counts 11-14 and 17 of the indictment. The maximum statutory sentence

for conviction on all five of those counts is 25 years imprisonment and a fine of $1,250,000.

2. The present indictment charges that from April, 2001, until at least June, 2002, the

defendants engaged in a $3.5 million fraud scheme involving the transfer of unregistered corporate

securities. The indictment alleges that for payments of money certain defendants, including

Favara, fraudulently provided, and other defendants fraudulently obtained, publicly-traded stock

in companies; defendants disseminated false and misleading information about the companies

through “spam” e-mails intending to inflate the stock-trading volume and price; and then defendants

dumped the stock by selling it to innocent purchasers for substantial gains. Defendant Frank
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Custable allegedly provided money in the form of sham loans to four publicly traded companies --

Pacel, Wasatch, Premier Axium and ShareCom – in return for the distribution of millions of shares

of stock in the four companies to individuals acting under Custable’s direction and control. To avoid

SEC registration and reporting requirements on the issuance and transfer of stock in publicly-traded

corporations, the defendants falsely represented to the SEC and to stock transfer agents that the

unregistered stock was issued in payment for “consulting services” to the companies or that the stock

had been issued to third parties for services rendered to the companies more than two years prior to

the issuance of the stock. The defendants include securities dealer Frank Custable and two

companies he allegedly controlled, a securities lawyer, and executives of six companies in Illinois,

California, Utah and Virginia. During the period of the scheme, Favara is alleged to have been the

chief executive officer of Premier Axium ASP, Inc., a Los Angeles company that purported to be

an administrator of employee benefits plans.

3. On April 18, 2005, Favara was released on a $4500 recognizance bond

which

required that she not violate any federal or state laws and, in addition to the standard conditions,

required Favara to maintain or actively seek employment. R. 17.

4. On January 8, 2008, Favara was charged by complaint in the Eastern District

of

California with mail fraud. The complaint and affidavit of FBI Special Agent Christopher Campion,

a copy of which is attached, alleges that in June, 2007, and continuing until the date of the complaint

Favara devised a scheme to defraud a South Lake Tahoe, Nevada, couple of more than $155,000 of

their retirement funds by inducing them to transfer those funds into accounts controlled by Favara,

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doing business as Zulu Equity Group. The complaint further alleges that in September and October,

2007, Favara fraudulently converted those assets to her own use and benefit.

5. Pretrial Services has filed a violation report in which it notes that it is the third report

filed by Pretrial Services citing allegations of financial frauds by Favara while she has been on

pretrial release. Pretrial Services asks that Favara’s bond be revoked and that she be taken into

custody pending trial in the present case which is scheduled to begin July 17, 2008.

6. In light of all of the above, Favara poses both a risk of flight and a threat to the

safety

of the community.

For the reasons stated above, the government asks this Court to revoke the bond and

terminate the pretrial release of defendant Christine Favara.

Respectfully submitted,

PATRICK J. FITZGERALD
United States Attorney

By: s/ John F. Podliska

JOHN F. PODLISKA
Assistant United States Attorney
219 South Dearborn Street - 5th Fl.
Chicago, Illinois 60604
(312) 353-2815