A federal grand jury in Phoenix has returned a 33-count indictment against CBS Radio Executive Brian Ongaro and eight other men for mail fraud, conspiracy and money laundering for allegedly misrepresenting their company, CORF Licensing Services (CLS), which issued licensees to establish outpatient facilities. The indictment states that from May 2001 through June 2003, four of the men involved in the scheme - David Goldfarb, Richard Ross, Paul Woodcock and Milton Guenther - contracted with over 300 licensees to establish facilities providing pulmonary respiratory therapy and physical therapy services. They marketed the concept through ads, a Web site and seminars, and allegedly misrepresented the financial benefits of owning and operating a facility. Prospective licensees paid anywhere from $100,000 to $165,000 to enter a contract with CLS for various services to get these facilities up and running, and they were referred to CORF owners Ongaro, James Bonebrake, Raymond Marshall, Colin McHale and Mike Nibler. Ongaro, who is based in Dallas, took in approximately $750,000 for his part in the arrangement.

FBI Special Agent in Charge John Lewis stated, “The defendants’ scheme to defraud was on-going and took in 40 million dollars. They solicited new licensees through ads, the Internet, seminars, statements, and use of paid referrals, knowingly and intentionally misrepresenting the quality of their company, CLS's services, by understating the costs and risks associated with establishing a CORF, including patient activity, potential income and profit.”

A conviction for Mail Fraud carries a maximum penalty of 20 years, a $250,000 fine or both. Conspiracy carries a maximum penalty of 5 years and a $250,000 fine or both, and a conviction for Money Laundering carries a maximum 20 years and a $500,000 fine or both to each count.