Federal prosecutors have accused the owner of a Northern Virginia coffee bean roasting company of running a $7 million Ponzi scheme that ripped off friends and associates, including $3 million from a well-known Washington philanthropist.
Hanif Hassan Moledina, owner of Bean East Corp., told lenders that he had a contract with Folgers to sell the coffee giant roasted beans acquired from Colombia, according to court documents filed in Alexandria’s federal court. But no contract existed, documents said, and the lie helped him obtain millions in high-interest loans. Moledina used some loans to pay back others. Eventually, the cash dried up and he could no longer pay back any loan, he admitted in a written statement to FBI agents.
In March, George F. Kettle won a $3 million lawsuit against Moledina after Bean East failed to pay back Kettle’s loans. Kettle, who over decades helped fund education programs for underprivileged children in the District, died in April.
According to the lawsuit, Moledina told Kettle he was putting more than $1 million of his own money into the business. He said Folgers had committed to buying 10,000 bags of coffee per quarter. Moledina promised a 35 percent return on the loan.
In his confession to the FBI, Moledina said he started having cash flow problems in 2005 after he bought three other companies. When the economy tanked, the problems grew worse.
Moledina began borrowing cash at above-market interest rates, “which made the cash flow problems worse,” he wrote.
“When I initially began borrowing money I did not lie to get the money,” Moledina admitted to the FBI. “But eventually I began to lie in order to induce people to lend me money.” He never had a contract with Folgers, Moledina wrote, and he lied to lenders about how much cash he and others were investing. Moledina used some loans pay off others.
According to an FBI agent’s sworn statement, Moledina used the cash “to maintain his extravagant lifestyle.”
Moledina appeared remorseful in his confession.
“I take full responsibility for my actions,” he wrote. “I hope to arrange a work out situation in which the lenders can be fully repaid.”
