BREAKING NEWS: Michael Riolo Sentenced To More Than 24 Years In Prison For Bilking Clients In Florida Ponzi Scheme That Collapsed After Nine Years

To many residents of Florida, Michael Riolo was their Bernard Madoff.

Riolo, 38, of Boca Raton, was sentenced to more than 24 years in prison (293 months) today for bilking investors in a $44 million Ponzi scheme. The scheme began in 1999 and collapsed in 2008.

“During these tough economic times, it is more important than ever that those who lie to and steal from the investing public be held accountable for their misconduct,” said Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida. “The United States Attorney’s Office will continue to investigate and prosecute those who perpetrate these large-scale fraud schemes.”

Riolo’s sentence was imposed by U.S. District Judge Kenneth A. Marra.

Police officers were among victims of Sterling Wentworth Currency Group Inc. and LaSalle International Clearing Corp., Riolo’s companies.

“From August 1999 to December 2008, Riolo caused more than 80 investors to invest approximately $44 million, based on materially false statements and omissions of material facts,” prosecutors said today.

Like Madoff, Riolo cooked the books.

“To encourage participating investors to keep their investments with the defendant, he would prepare and distribute to investors monthly profit and loss statements that falsely reported consistent trading profits and increasing account balances,” prosecutors said.

“In furtherance of the scheme, Riolo misdirected money he received from some investors to make distributions to other investors who sought to withdraw money from their investment accounts.”

Riolo took money from new investors to pay old ones in classic Ponzi fashion, prosecutors said.

“[He] disbursed more than $29.5 million to investors as a purported return of principal and profits, when in fact, most of the returns paid by the defendant to the investors came directly from new investment monies, not profits,” prosecutors said.

Investigators have exposed two significant Ponzi schemes in Florida in the past 48 hours alone. The alleged schemes occurred on the heels of Madoff’s massive, $65 million Ponzi fraud, and allegations that Florida residents Arthur Nadel and Andy Bowdoin has schemed hundreds of millions of dollars from investors in Ponzi frauds.

Read story about another Florida Ponzi case Sloman’s office is prosecuting.

Read story about yet another Florida Ponzi scheme exposed in the past 48 hours.

Florida’s real-estate market has been battered by the recession. The state has one of the highest mortgage-foreclosure rates in the United States, and some counties have high concentrations of residents vulnerable to scams, including senior citizens and immigrant populations.

Despite the fact senior citizens are vulnerable to Ponzi schemes, some members of the Pro-AdSurfDaily Surf’s Up forum discussed a plan to ask AARP, an association that advocates for seniors, to advocate on behalf of ASD.

AARP later joined with Florida Attorney General Bill McCollum in an effort to strengthen securities laws in the state.