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Tag: U.S. Attorney Jim Letten

  • PONZI NEWS/NOTES: Judge Says Matthew Pizzolato ‘Swindled The Salt Of The Earth’; Feds Allege New Scheme In New York; Henri Zogaib Arrested Again In Florida

    EDITOR’S NOTE: The briefs below summarize recent developments in Ponzi cases or actions in new Ponzi cases.

    Sentenced: Matthew B. Pizzolato, 26, Tickfaw, La. Ripped off senior citizens in Ponzi scheme.

    In sentencing Pizzolato to 30 years in federal prison, U. S. District Judge Lance M. Africk said Pizzolato “stole from hard working Americans” and “swindled the salt of the earth,” prosecutors noted.

    “[B]ecause of you,” the judge noted, “many must find ways to pay for their daily bread.”

    Prosecutors called the 30-year sentence “powerful.”

    “[The] powerful 30-year federal prison sentence handed down by U. S. District [Judge] Africk against convicted swindler Matthew Pizzolato will hopefully serve as a stark deterrent to those calculating predators who, like Pizzolato, may seek to prey on the trust and innocence of hard working citizens,” said U.S. Attorney Jim Letten. “The human wreckage of broken lives, dreams, and peace of mind — as well as stolen life savings — is shockingly evident in this case and in the tragedies of the victims whom Pizzolato hunted. Our hope is that these decent, trusting victims can begin to find some sense of justice and peace knowing that this criminal will not steal again.”

    A veteran FBI agent said members of the public would serve themselves well by imagining how a Ponzi scheme aimed at senior citizens could cripple entire families.

    “Mr. Pizzolato targeted senior citizens for his own gain,” said David Welker, FBI special agent in charge. “Personalizing this — what if it was your own mother, father or grandparent? Mr. Pizzolato’s actions were reprehensible and his punishment reflects the seriousness of his crime.”

    The IRS is well-equipped to peel back layers of the Ponzi onion, a criminal investigator said.

    “Special Agents of IRS Criminal Investigation are highly trained investigators who specialize in financial crimes of greed,” said Michael J. De Palma, special agent in charge of the IRS Criminal Investigation Unit. “We are committed in our efforts and will continue to work with our Law Enforcement partners and the United States Attorney’s Office to pursue evidence of criminal activity wherever it leads.”

    Postal inspectors have prioritized the investigation of crimes against senior citizens, an official said.

    “Frauds against the elderly are a priority for the Postal Inspection Service and we will continue to work closely with our partners to aggressively investigate these types of crimes,” said Keith E. Milke, U. S. postal inspector in charge.

    Accused: Laurence M. Brown, a certified public accountant in Armonk, N.Y. Brown was arrested on allegations of securities fraud, wire fraud and money-laundering. Prosecutors said he fleeced investors in a $2 million Ponzi scheme involving a purported gas pipeline in Tennessee. Brown was sued separately by the SEC.

    One need not pull off a Bernard Madoff-sized fraud to get the attention of the Feds, a top prosecutor said.

    “Laurence Brown allegedly concocted a scheme that fleeced clients and fattened his own wallet,” said U.S. Attorney Preet Bharara. “[The] charges show that you do not have to be a billion-dollar Ponzi schemer to get our attention. We are committed to rooting out financial fraud wherever it may hide.”

    Investors were duped into putting money into a company known as Infinity Reserves-
    Tennessee Inc. The SEC also charged Ronald J. Mangini in its civil case, saying he and Brown fraudulently sold securities and misappropriated the money for their own use. Mangini also is an accountant, the SEC said.

    “In fact,” the SEC said, “the securities Brown and Mangini sold were fictitious.

    “Infinity Reserves is the name of a company owned by one of their clients, and the company’s principal asset is a now defunct natural gas pipeline in Tennessee,” the agency continued. “Without the knowledge or authorization of the client, who is the sole shareholder of Infinity Reserves, Brown and Mangini have been falsely holding themselves out to investors as senior officers of Infinity Reserves with authority to sell the phony securities at issue.”

    Arrested: Former Grand Am racecar driver Henri Zogaib has been arrested again after making bail in the original case filed against him in Florida, WFTV reports.

    As the original Ponzi probe progressed, investigators discovered other victims, including NASCAR drivers, the station reported.

    Zogaib’s bail now has been upped to $2.2 million, and there may be other victims, the station reported. Bail on the original arrest was set at $100,000.

    Guilty plea: Donald Anthony Young, 38, of Palm Beach, Florida, has pleaded guilty to one count of mail fraud and one count of money laundering. Federal prosecutors charged him in a $25 million fraud scheme involving companies operating in Pennsylvania.

    “He solicited individuals to invest with him, claiming that their funds would be invested in the stocks of large stable companies,” prosecutors said. “Ultimately, Young obtained more than $95 million from his investors. Instead of investing all of these funds as promised, Young allegedly diverted more than $25 million of investor funds for his own use, purchasing, among other things, luxury homes for himself in Palm Beach, Florida, Coatesville, Pennsylvania, and Northeast Harbor, Maine.

    “When investors requested redemptions, Young was forced to liquidate other investors’ funds to make the pay outs,” prosecutors said.

    Young also tried to obstruct the SEC probe, prosecutors said.

    “When the United States Securities and Exchange Commission opened an investigation into Young’s business, Young attempted to obstruct the investigation by providing false and misleading information to the SEC and by refusing to provide the SEC documents, to which it was legally entitled.”

    Young used $1.9 million in funds stolen from investors “to purchase his luxury home in Palm Beach,” prosecutors said.

    In January, U.S. Attorney General Eric Holder ventured to the Palm Beach area, warning fraudsters they were writing their own tickets to jail.

    Young faces up to 30 years in prison when sentenced in October, prosecutors said.

  • SENIORS HARMED: Judge Issues Findings In CFTC Case Against Matthew B. Pizzolato; Says Investors Lost Retirement Savings In Scheme

    A Louisiania man charged criminally in an alleged Ponzi scheme and sued civilly on the same day last month lied to investors, some of whom liquidated retirement savings and annuities only to suffer massive losses by entrusting funds to Matthew B. Pizzolato, a federal judge has ruled.

    The case against Pizzolato is proceeding on separate tracks: a criminal prosecution by U.S. Attorney Jim Letten with the help of the FBI, the IRS, the U.S. Postal Inspection Service and the State of Louisiana Office of Financial Institutions, and a civil prosecution brought by the Commodity Futures Trading Commission.

    U.S. District Judge Mary Ann Vial Lemmon of the Eastern District of Louisiana now has extended an asset freeze, enjoined Pizzolato from breaking commodities laws and issued some findings in the civil case.

    Pizzolato is  26. He formerly resided in Tickfaw.

    Among Lemmon’s findings were that Pizzolato and his co-defendants in the civil case — William Guidry, 35, of Plano. Texas, and Jacksonville, Fla., and Capital Funding Consultants LLC of Covington, La. — ripped off senior citizens. Guidry and Capital Funding’s assets also have been frozen, and they have been enjoined from breaking the law.

    “Specifically, the order finds that Pizzolato, as part of a broader scheme in which he solicited $19.5 million, obtained more than $3.1 million from 24 mostly elderly investors, which he gave to Guidry to invest,” CFTC said.

    “Despite representing to these elderly investors that their funds would be invested in safe, secure investments with guaranteed rates of return, Pizzolato gave the funds to Guidry to trade high risk commodity futures, among other things,” CFTC continued. “The order also finds that Guidry and Capital Funding misappropriated more than $221,815.53 of investor funds for personal purposes, and used some of those misappropriated funds to trade commodity futures in accounts owned by Capital Funding. The investors were not told about Guidry’s commodity futures trading losses. The order further finds that Guidry and Capital Funding commingled commodity pool participants’ funds with the funds of other persons.”

    In the criminal case, which is being heard by U.S. District Judge Lance M. Africk, Pizzolato was charged with 52 counts of mail fraud, two counts of wire fraud, seven counts of money laundering, and single counts of securities fraud, obstruction of justice and witness tampering.

    He faces more than 1,100 years in prison and a fine of more than $16 million, if convicted on all counts. As many as 160 people were duped, prosecutors said.

    Prosecutors said Pizzolato attempted to silence employees with bribes of $20,000 and get them to destroy records to cover up the scheme. Meanwhile, they said Pizzolato obstructed justice by stealing documents that could incriminate him from the home of a client.

    Among the luxury items Pizzolato purchased with investors’ money were a BMW 750LI, a Mercedes Benz S430V, a Range Rover Sport and a Chevrolet Corvette, prosecutors said. He also bought sports tickets, a $35,000 engagement ring, a $500,000 home in Ponchatoula, La., and spent $35,000 on Carnival cruises.

    All in all, Pizzolato took about $19.5 million from clients and spent “nearly all” of it, prosecutors said.