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Boca Raton Man Pleads Guilty in Multi-Million Dollar “Ponzi” Scheme
Jeffrey H. Sloman, Acting United States Attorney for the Southern District of Florida, Michael J. Folmar, Acting Special Agent in Charge, Federal Bureau of Investigation, and Linda Charity, Acting Commissioner, State of Florida Office of Financial Regulation, announced that defendant Michael Riolo, 38, of Boca Raton, FL, pled guilty today to five counts of mail fraud, in violation of Title 18, United States Code, Section 1341. At sentencing, defendant Riolo faces up to 20 years’ imprisonment on each count. Sentencing is scheduled for October 16, 2009 at 3:30 p.m. in West Palm Beach, FL, before U.S. District Judge Kenneth A. Marra.
According to court documents, Riolo owned and operated Sterling Wentworth Currency Group, Inc. and LaSalle International Clearing Corporation, which he used to defraud investors, including several current and former police officers, out of millions of dollars. Riolo induced individuals to invest money with him in the Foreign Exchange Market (“FOREX”) by leading them to believe that they would receive substantial profits from their investments. Instead of using investor monies to trade in foreign currency, Riolo used the investor monies for other purposes, including personal use.
According to court documents, 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. To encourage participating investors to keep their investments with him, Riolo would prepare and distribute to investors monthly profit and loss statements that falsely reported consistent trading profits and increasing account balances. 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. In this way, Riolo 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.
Mr. Sloman commended the investigative efforts of the FBI, the State of Florida Office of Financial Regulation, and the Commodities Futures Trading Commission. This case is being handled by Assistant U.S. Attorney Rolando Garcia.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
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