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“Operation Scorch,” a two-year police investigation, culminated in seized property valued at $20 million and fraud operations valued at $57 million.
The investigation began February 2, 2008, when members of the Phoenix Police Department Liquor Enforcement Squad conducted a Hot Spot Liquor Task Force inspection at the Scorch Bar located at Desert Ridge Mall. Investigators learned the owners of the bar had illegally purchased alcohol from other than a primary source of supply, leading them to believe that the bar was operating under a hidden ownership.
During the two-year investigation, the following suspects and businesses were identified: Nazreth Derboghossian, 50, Ara Derboghossian, Mario de la Fuente Manriquez, Mario de la Fuente Mix, 43, Jodi Lynn Upton, Katie Peters, Douglas Gordon Allen, Scorch Bar, Coyote Bay Night Club (CNBC), RPM Ultra Club & Lounge, Exotic Auto Sales and Motor Cars, and Exotic Cars at Caesars Palace in Las Vegas, Nevada.
The de la Fuente-Derboghossian Enterprise, beginning around May 2001 and continuing through December 2008, began controlling and conducting an illegal enterprise under the directing control of Nazreth Derboghossian, and the financial funding of Mario de la Fuente Manriquez and Mario de la Fuente Mix. These suspects operated a motor vehicle dealership without having first made application to disclose the true controlling or financial interest holders of the license to the state. Nazreth Derboghossian, with the assistance of members of the organization, filed fraudulent documents with government agencies.
Members of the organization utilized the business and its financial accounts to carry out fraud against victims. They used fraudulently obtained duplicate Arizona MVD titles to sell several vehicles, failing to pay off the original loans and consignment agreements, and then retained the proceeds of those sales for personal gain. Those proceeds were then intermingled with other investment money and used to control and fund the purchase and control of three liquor licenses, and substantially fund two other car dealerships, including one in Las Vegas, Nevada.
In November 2009, the listed suspects were indicted on 102 felony counts. On January 20, 2010, nine search warrants were served in Phoenix, Scottsdale, Glendale, Tucson, and Nogales. The suspects were taken into custody with out incident.
As a result of the investigation, 10 residential properties were seized along with 28 vehicles, stock investments, personal and business bank accounts, and large amounts of jewelry, coins and cash.