Brothers Charged in $8 Million Investment Fraud Scheme
|U.S. Attorney’s Office December 03, 2010|
BUFFALO—U.S. Attorney William J. Hochul, Jr. announced today that a federal grand jury has returned a 47-count indictment charging Michael H. Wilson, 23, formerly of Hamburg, New York, with wire fraud, money laundering, and conspiracy. Wilson's brother, William W. Wilson, 21, of Cleveland, Ohio, is charged with two counts of wire fraud and conspiracy. The maximum penalty for each fraud count is 20 years in prison and a $250,000 fine. The money laundering charge carries a penalty of up to 10 years in prison and a $250,000 fine.
Assistant U.S. Attorney Paul J. Campana, who is handling the criminal case, and Richard D. Kaufman, Chief of the U.S. Attorney's Office's Asset Forfeiture and Financial Litigation Unit, stated that the indictment accuses Michael Wilson of attempting to defraud investors out of more than $8,000,000 between June 2008 and July 2009 and another $71,875 in July 2010. The indictment charges that Michael Wilson created several investment companies known collectively as "New Frontier," including such names as "Phantom Holdings" and others, all purportedly located at 6553 Boston State Road in Hamburg, New York, adjacent to his residence. The defendant thereafter induced individuals and companies to invest in financial instruments with complex sounding names—such as "leveraging" agreements—that promised high-yield earnings and returns.
The indictment states that rather than investing clients' money, Michael Wilson spent it on a variety of personal items, including $2.5 million for a down payment for Boston State Road properties, automobiles—including a Hummer, a Corvette, two Land Rovers, and a Mercedes ML 500—artwork, and other items. The indictment also discloses that in January 2009, Wilson paid $1,800 to hire an actor from a talent agency to portray a person using the name of an alias ("George Possiodis")—which name and persona the defendant used during his scheme. The indictment seeks the forfeiture of more than $3,000,000 that Michael Wilson allegedly stole from investors and spent.
The indictment also alleges that in July 2010, Michael Wilson and his brother, William Wilson, conspired to receive two wire transfers totaling $71,875, which a client believed would be invested by "Zodiak Capital," another one of Michael Wilson's companies. $70,325 of the $71,875 never reached Michael or William Wilson because the government successfully froze and seized the money before it could be withdrawn from two accounts it had been wired into.
Earlier this year, the government completed the successful civil forfeiture of five automobiles, as well as three recreational vehicles, artwork and electronic items that had been seized by the FBI on July 1, 2009 during the execution of search and seizure warrants at Michael Wilson's residential and office properties.
"This case is an excellent example of why it is so important for investors to know exactly who they are entrusting their money to," said U.S. Attorney Hochul. "As this case demonstrates, my office will do whatever it takes to stop these so-called financial experts from victimizing the public, including freezing and seizing their assets. In the case of Michael Wilson, my office will apply to have him extradited from Canada if he does not appear voluntarily in U.S. District Court here in Buffalo to answer these charges."
William Wilson was arrested in Columbus, Ohio, this morning by special agents of the FBI and the Internal Revenue Service, Criminal Investigation Division. Michael Wilson is believed to be residing in Canada.
The Indictment is the result of an investigation by special agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge James H. Robertson, and the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent in Charge Patricia J. Haynes.
The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.