September 8, 09

NEWS / Phoenix Diversified Commodities Trader Pleads Guilty to Tax, Mortgage, and Fraud Charges in $37 Mill

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, Miami Field Office, Daniel W. Auer, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, Miami Field Office, and J. Thomas Cardwell, Commissioner, State of Florida’s Office of Financial Regulation, announced that defendant Michael A. Meisner, 52, of Boca Raton, Florida, pled guilty today before the Honorable U.S. Magistrate Judge James M. Hopkins to a three-count Information filed on September 2, 2009, which charged mail fraud, in violation of 18 U.S.C.§ 1341, loan application fraud, in violation of 18 U.S.C. § 1014, and tax evasion, in violation of 26 U.S.C. § 7201. Bond was set at a $500,000 corporate surety bond, and a $500,000 personal surety bond. Sentencing was set for November 20, 2009, at 9:30 a.m., before the Honorable U.S. District Judge Kenneth A. Marra. Meisner faces a maximum of 55 years imprisonment.

As set forth in the Information and the written proffer filed with his plea agreement, in approximately October, 2001, Meisner, a registered commodity trading advisor, incorporated a company called Phoenix Diversified Investment Corporation (PDIC). Meisner, through PDIC, accepted in excess of $37 million from over 260 investors through and until approximately May, 2008, when PDIC was placed into receivership and bankruptcy.

In order to solicit investors, Meisner made materially false and fraudulent statements about his background and about PDIC’s performance, and omitted material facts. He lied to prospective investors, telling them that he was a highly successful commodities trader who had developed a commodities index software trading program that consistently resulted in profitable commodity futures trades. He provided falsified historical performance return sheets which showed high monthly returns on trades, and told prospective investors that their investments were safe and secure, and that their principal investment was guaranteed and not at risk.

Meisner failed to tell prospective investors that only approximately $13 million of the approximate $37 million in PDIC investor funds were deposited into commodities trading accounts. Though he represented profit to the investors, in reality, trades on these funds showed a net trading loss in excess of $6 million. Meisner also failed to tell potential investors that approximately $22 million of PDIC investor monies were not invested but, instead, were used to make fraudulent ponzi-type “interest payments” to prior investors.

In addition, Meisner failed tell potential investors that approximately $6.8 million in PDIC investor monies were used to support his and his family’s luxurious lifestyle. PDIC investor monies were used to pay for, among other things: the purchase or lease of at least 15 luxury cars, including a $217,800 2005 Bentley GT and a $152,000 2005 Aston Martin; the purchase or lease of eight luxury Palm Beach county residences, including high-end single-family homes in gated communities and oceanfront condominiums; luxury vacations, private education expenses, country club fees, multiple large-screen televisions and other high-end electronics, luxury clothing and housewares, and a lavish wedding for his daughter held at Mar-A-Lago on Palm Beach.

Meisner also admitted that on or about April 20, 2006, he filed a false application in order to obtain a $1,000,000 mortgage loan on certain property located on NW 49th Lane, Boca Raton, Florida.

He further admitted that from on or about October 21, 2006, up to and including the present, he evaded the payment of a large part of the $444,581 in federal income tax he reported he owed for 2005 by, among other things, using corporate PDIC business funds to pay for personal living expenses related to his lavish lifestyle.

Mr. Sloman commended the investigative efforts of the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation Division, and the State of Florida’s Office of Financial Regulation. The case is being handled by Assistant U.S. Attorney Carolyn Bell.

http://miami.fbi.gov/dojpressrel/pressrel09/mm090409.htm

Tags: corporation, criminal investigation,