A Florida man has admitted to operating an investment fraud scheme that allegedly defrauded more than 10,000 people. Investigators say the man’s scheme generated more than $55 million. The 72-year-old Palm City resident has pleaded guilty to one count of wire fraud as part of an agreement negotiated with the U.S. Attorney’s Office. When he is sentenced on June 16, he could be sent to a federal prison for up to 20 years.
Wealthy buyers
According to a Feb. 23 press release from the U.S. Department of Justice, the man attracted investors by claiming that they would benefit from the purchase of a group of technology companies by a consortium of wealthy buyers. Prosecutors also claim that the man offered investors a guaranteed 7% return for three years if the deal failed to materialize despite not having the funds to make good on his promise. The owner of the group of technology companies has also been charged with fraud.
Personal purposes
The man is also said to have told investors that none of the money he raised would be used for personal purposes. According to the U.S. attorney prosecuting the case, the man used approximately $2.5 million of the money he raised by operating the scheme to buy and sell cryptocurrencies, meet his payroll expenses and purchase a life insurance policy for one of his family members.
Plea agreement
While the man could be sentenced to 20 years in prison for his behavior, he probably will not be. The fact that he has pleaded guilty indicates that he has entered into a plea agreement with federal prosecutors, which likely includes a lenient sentencing recommendation. Prosecutors are often willing to offer these deals even when they have compelling evidence to avoid the costs and risks of a trial.
