Florida Recidivist Swindler John A. Mattera Pleads Guilty In Fraud Scheme That Traded On Names Of Facebook And Groupon

John Mattera: Source: Mattera Foundation Nov. 2. 2011, news release.

John A. Mattera, the recidivist Boca Raton swindler who was charged civilly and criminally last year in a new caper, has pleaded guilty to one count of securities fraud, one count of wire fraud and one count of conspiracy to commit securities fraud and wire fraud, federal prosecutors said.

He potentially faces decades in prison.

Mattera, 50, was charged last year by the SEC and the office of U.S. Attorney Preet Bharara of the Southern District of New York with duping investors into believing his purported hedge fund had the inside track on shares of Facebook and Groupon in advance of the IPOs.

The purported fund had the high-sounding name of “The Praetorian Global Fund,” investigators said.

“With false promises of profitable investments in high-profile stock, John Mattera lured unsuspecting investors into a meticulously orchestrated, multi-million dollar fraud scheme, and used their money to fund his lavish lifestyle,” Bharara said.

Investors plowed millions of dollars into the scheme, believing their money would be held in “escrow” at a Florida bank and that they’d have an advantage because Mattera held the key to higher Facebook and Groupon profits when the companies went public, prosecutors said.

“However, instead of maintaining the investor money in the escrow accounts as Mattera promised, Mattera caused the vast majority of the funds to be transferred to other entities with which he was associated,” prosecutors said.  “Ultimately, Mattera misappropriated approximately $13 million of investor money, spending nearly $4 million on personal items for himself and his family, such as expensive jewelry, interior decorating and luxury cars.”

And, prosecutors noted, “neither Mattera, Praetorian nor the G Power Entities held these shares of stock.”

Mattera pleaded guilty in 2003 to seven counts of grand theft in three separate Florida criminal cases, according to court records. Among other things, “Mattera stole $34,000 from two Florida investors by promising to provide them with shares of stock that Mattera falsely represented he owned,” the SEC said of the 2003 cases.

In 2009, the SEC charged Mattera “with fraudulently attempting to avoid registration requirements by backdating promissory notes to obtain improperly unrestricted shares of a company,” according to the agency.

Despite his history of engineering fraud schemes, Mattera positioned himself as a community volunteer and head of a foundation, rubbing elbows with the American Red Cross and Florida’s elite in the days and months leading up to his most recent scam.