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Tag: U.S. Attorney Zane David Memeger

  • UPDATE: Alleged ‘PhoneCard USA’ Ponzi Schemer Once Arrested In Brazil On Narcotics Charges Now Charged In United States With Possessing ‘Improvised Explosive Devices’

    ponzinews1Istvan Merchenthaler, the U.S.-based alleged “PhoneCard USA” Ponzi schemer who reportedly was arrested on narcotics-trafficking charges in Brazil a decade ago and later was linked to pipe bombs found in Pennsylvania and North Carolina, has been indicted on charges of possessing “approximately 60 plastic PVC pipe improvised explosive devices” plus “approximately 400 cardboard tube IEDs, a 9mm Cobray M-11 semi-automatic machine pistol, and ammunition,” federal prosecutors in the Eastern District of Pennsylvania said.

    “IED” stands for “improvised explosive devices.” Such devices have been associated with terrorism and guerrilla warfare. A common form is the roadside bomb.

    Merchenthaler, 43, additionally was indicted  in Maryland on two counts of being a fugitive in possession of firearms and ammunition and one count of possessing an unregistered destructive device. Further south, in North Carolina, Merchenthaler was indicted on two counts of being a fugitive in possession of firearms and ammunition and one count of possessing an unregistered destructive device.

    The IEDs, machine pistol and ammunition were found after the first of two Ponzi indictments against Merchenthaler was handed down in 2012. The Maryland and North Carolina cases have been consolidated and will be heard by U.S. District Judge Robert F. Kelly of the Eastern District of Pennsylvania.

    From a statement by the office of U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania (italics added):

    [F]rom at least about May 2006 to about February 2013, Merchenthaler claimed to be the founder of PhoneCard USA, a company that was purportedly a “premier distribution source” for prepaid phone cards and cell phones.  Merchenthaler, who used a number of aliases, falsely claimed that PhoneCard USA had “lucrative contracts” with major retail chain stores including Walmart, 7-Eleven, and BJ’s Wholesale Club.  Further, Merchenthaler falsely claimed to have friendships with executives at Walmart and 7-Eleven.  In reality, Merchenthaler operated a “Ponzi” scheme, stealing over $2 million from over 200 investors and using much of these funds for his own benefit and to perpetuate his scheme.

    Merchentaler allegedly possessed pipe bombs.

    In at least one promo by an apparent affiliate of the uber-bizarre MPB Today MLM “program” in 2010, pipe bombs were referenced — in the context of Walmart. An online promo for MPB Today claimed this (italics added):

    If you “hate Walmart and have written a 603 page manifesto on how Walmart is trying to take over the world and steal your soul,” you should “stop making that pipe bomb and read how you can avoid Walmart and still make bank,” according to the pitch.

    Like Merchenthaler allegedly did with PhoneCard USA, some MPB Today promoters claimed that the “program” had been endorsed by Walmart. It is common for scammers to imply ties to famous businesses.

    Indicted alongside Merchenthaler in the IED case was Ryan Joseph Hribick, 32, of Coatesville, Pa. He was charged with count of possession of unregistered firearms, one count of manufacturing and dealing explosive materials, one count of conspiracy to obstruct justice and one count of witness tampering.

    Hribick, prosecutors said, “instructed and conspired with others to destroy and conceal cardboard tubes and flash powder – which Hribick was using to manufacture IEDs – so as to keep that evidence from federal agents and the federal grand jury.”

    And Hribick “attempted to influence the testimony of a federal grand jury witness regarding the destruction and concealment of evidence,” prosecutors said.

  • Philly Affinity Fraudster Traded On Coca-Cola’s Name And Ran Ponzi, Feds Say

    ponzinews1EDITOR’S NOTE: Affinity fraud takes many forms. The case against Constant Damas appears to have been one that married an appeal to a common nationality to an appeal to the taste buds and brand recognition. Scammers often trade on the names of famous companies and individuals. And they often issue appeals to people of common ancestry or background.

    UPDATED 8:56 P.M. EDT U.S.A. A 45-year-old Philadelphia man who worked as an account manager at Coca-Cola Co. used his famous employer’s name to dupe people into investing in his Ponzi scheme, the office of U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania said.

    Constant Damas swindled more than $1 million from at least 20 people over a period of five years, federal prosecutors said.

    Damas is a native of Haiti and targeted the Haitian community, including family members and friends, prosecutors said.

    He has pleaded guilty to two counts of wire fraud. From a statement by prosecutors (italics added):

    Between 2007 through the end of 2012, Damas, who was an account manager at Coca-Cola Company, misrepresented to various individuals, including family members and friends in his Haitian community, that he was an investment manager at Coca-Cola.  He told his victims that, through this position, he could invest their money in Coca-Cola’s investment opportunities.  In fact, Damas did not hold this position and no such opportunities existed.  To entice his victims, Damas often made the following false representations to them:  he would collect a sum of money from the victims as their “principle” investment; the victims would receive an interest payment of a certain amount every month; and they could receive their principle payment upon request.  Damas, however, did not return the full “principle” investment amount back to his victims, and many of the victims did not receive any of their funds back or any interest payments.  Upon his arrest in February 2013, Damas admitted to federal agents that this was a “scam business.”

    Damas is scheduled to be sentenced Sept. 30. He potentially faces decades in federal prison.

  • FEDS: Istvan Merchenthaler Charged In Alleged ‘Prepaid Phone Cards’ Ponzi Scheme That Stole More Than $2 Million From Investors

    EDITOR’S NOTE: If you’re keeping a “Bubba Blue” notebook on how to have your Ponzi scheme, this alleged caper in Greater Philadelphia involving prepaid phone cards and purported ties to major retailers perhaps merits an entry . . .

    A 42-year-old Pennsylvania man has been charged in an alleged “prepaid phone cards” Ponzi scheme that operated for more than five years and bilked more than 200 investors out of more than $2 million.

    Istvan Merchenthaler of Downingtown was indicted on four counts of wire fraud, one count of aggravated identity theft and two counts of money laundering, the office of U.S. Attorney Zane David Memeger of the Eastern District of Pennsylvania said.

    Merchenthaler also is known as Steve Merchenthaler, prosecutor said, alleging that the scheme operated “at least” between May 2006 and September 2011.

    The long-running scam involved a business known as PhoneCard USA of which Merchenthaler claimed to be the founder, prosecutors said.

    They described the scheme as one that duped investors by trading on fancy terms such as “exponential growth,” defining the market as a wide geographic expanse and fabricating ties to famous businesses to keep the Ponzi wheel greased.

    Merchenthaler positioned PhoneCard USA as a “premier distribution source” for phone cards and cell phones, claiming to have contracts with Walmart, 7-Eleven and BJ’s Wholesale Club, prosecutors said.

    It is common for scammers to purport to have ties to famous business entities — and that proved to be the case with Merchenthaler and his PhoneCard USA pitch, prosecutors said.

    “In reality, Merchenthaler had no such contracts with these major retail chain stores,” prosecutors said.

    Investors were drawn into the Ponzi morass in part through claims that the firm’s “lucrative contracts” with vendors covered “territories that span the east coast,” prosecutors said.

    “Merchenthaler claimed that these investments would finance the ‘exponential growth’ of PhoneCard USA and would provide investors with ‘generous returns’ on their investments,” prosecutors said.

    An investigation demonstrated that “Merchenthaler operated a ‘Ponzi’ scheme, stealing over $2 million from over 200 investors and using much of these funds for his own benefit and to perpetuate his scheme,” prosecutors said.

    The FBI and IRS led the probe.