3 Michigan Men Charged With Racketeering For Their Local Roles In Alleged $350 Million National Ponzi Scheme
Three Michigan men were arrested for racketeering today for their local roles in an alleged national Ponzi scheme that targeted senior citizens.
Robert Valeri Sr., 59, of South Lyon, Robert Antonio Valeri Jr., 32, of Canton, and Jeffrey Ron Mitchell, 39, of Walled Lake, were accused of cheating 125 Michigan seniors out of their life savings in a time-share Ponzi scheme.
“[They] allegedly participated with Indiana resident and scam mastermind Michael Kelly in a massive Ponzi scheme, selling time shares in the form of an unregistered security called a ‘Universal Lease’ through a company called Resort Holdings International,” prosecutors said.
The case was brought by Michigan Attorney General Mike Cox, whose office recently has brought racketeering charges in two other fraud or Ponzi scheme cases.
“Our parents and grandparents spent their lives working hard to provide for their families and to build the Michigan we enjoy today,” said Cox. “They deserve to know that their investments are being made safely and that those who would steal from them are being held accountable.”
Investigators said the alleged Resort Holdings International scheme “took in an estimated $350 million nationwide and as much as $9 million in Michigan. It imploded due to deliberate overselling of shares in the Universal Lease program, leaving investors with empty pockets and broken promises.”
Valeri Sr., Valeri Jr. and Mitchell were charged with Conducting Criminal Enterprise (Racketeering), a felony punishable by up to 20 years in prison and/or a fine of up to $100,000. In addition, they were charged with Conspiracy to Sell an Unregistered Security, a felony punishable by up to 10 years in prison and/or a $10,000 fine.
Mitchell and Valeri Sr. also were charged with Selling an Unregistered Security and Omitting to Disclose Material Information during the Sale of a Security, both felonies punishable by up to 10 years in prison and/or a $25,000 fine.
The trio was arraigned in 19th District Court before Judge Richard Wygonik. Bond was set at $25,000. A court date is set for March 19.
Investigators said the men targeted “senior citizens and retirees with marketing efforts that illegally promoted the lease as a safe investment opportunity with the promise of large monetary returns.
“While seniors purchasing the lease were allegedly given the option to use the vacation property during specified times over a 25-year term, they were also given the option of having a purported third-party management company arrange for the rental of the unit during the same time period for a guaranteed 9 percent return — whether the unit was rented or not.
“They were encouraged to elect the latter option and everyone who purchased the lease did,” prosecutors said. “In reality, Kelly also controlled the third-party management company.”
Kelly, 60, a citizen of the United States, Mexico and Belize, was charged criminally three years ago today for his role in the alleged scheme. Additional criminal charges were filed against him in 2008, and he also has been charged civilly by the SEC. He is jailed, awaiting trial.
Michigan residents who believe they or a family member may have given funds to Mitchell, Valeri, Sr., Valeri Jr. or Kelly are asked to contact Cox’s office at 313-456-0180.
Federal prosecutors have seized an estimated $160 million to $175 million in property in the Kelly case, Cox’s office said.
On Dec. 3, in a separate Ponzi case, Rita Gosselin of Grosse Ile, Mich., was arrested by investigators from the Southgate Police Department and Cox’s office. Gosselin was charged with racketeering in an alleged real-estate Ponzi scheme.
In an alleged fraud scheme that targeted churches, Cox’s office brought racketeering charges against Michael J. Morris and William T. Perkins on Oct. 5.