Los Angeles, CA – A former revenue agent with the Internal Revenue Service was sentenced today to 33 months in prison in relation to a securities fraud scheme that took more than $8 million from hundreds of victims across the country.

George Tannous, 55, of Lake View Terrace, was sentenced by United States District Court Judge Dean D. Pregerson. In addition to the prison term, Judge Pregerson ordered Tannous to pay total restitution of $8,797,201 to 218 victims.

In May of 2008, Tannous pleaded guilty to a two-count Information charging him with conspiracy and subscription to a false tax return. The charges related to Tannous’ participation in a scheme to defraud investors nationwide through material misrepresentations and the concealment of material facts in the sale of investments in Bidbay.com, Inc., AskGT.com, Inc., and related companies from 1999 through 2003.

Documents filed with the court outline a scheme in which Tannous and three co-conspirators solicited victims to purchase unregistered stock in Bidbay.com, Inc. and several related companies. Tannous was the president of Bidbay. Bidbay was in the business of developing and marketing an internet auction website. According to the plea agreement, victims were lured by false statements that Bidbay.com would soon be acquired by internet auction company eBay, Inc. of San Jose, California.

Tannous failed to disclose that Bidbay.com and the related companies paid sales commissions of up to 50% percent to telemarketers who solicited investors, according to court papers. In 2001, Tannous personally received nearly $3 million in investor funds that he failed to disclose to the IRS.

According to documents filed with the court, Tannous further failed to disclose to investors that one of his co-conspirators was a convicted felon awaiting sentencing on unrelated fraud charges. That co-conspirator, De Elroy Beeler, Jr., was sentenced to 36 months in custody in 2002. Upon his release from custody in 2005, Beeler returned to telemarketing and is awaiting sentencing in the related case.

The investigation and prosecution of Tannous was conducted by IRS-Criminal Investigation and the Federal Bureau of Investigation, in conjunction with the United States Attorney’s Office for the Central District of California.