Boca Raton Man Charged in Multi-Million-Dollar Ponzi Scheme

R. Alexander Acosta, United States Attorney for the Southern District of Florida, Jonathan I. Solomon, Special Agent in Charge, Federal Bureau of Investigation, and Alex Hager, Acting Commissioner, State of Florida, Office of Financial Regulation, announced that defendant Michael Riolo, 37, of Boca Raton, FL, was charged in criminal Information filed today with five counts of mail fraud in connection with a multi-million dollar Ponzi scheme.

According to the Information, Riolo owned and operated Sterling Wentworth Currency Group, Inc. and LaSalle International Clearing Corporation. Riolo allegedly used these companies to defraud investors, including several current and former police officers, out of millions of dollars. The Information alleges that Riolo induced individuals to invest money with him in the Foreign Exchange Market (“FOREX”) by assuring them that they would receive substantial profits from their investments. Instead of using investor monies to trade in foreign currency, Riolo used investor funds for other purposes, including Riolo’s personal use and benefit.

The Information further alleges that 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 the defendant, 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. Defendant Riolo allegedly disbursed more than $29.5 million to investors as 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.

If convicted, the defendant faces a maximum of 20 years’ imprisonment on each count of mail fraud charges.

Mr. Acosta commended the investigative efforts of the FBI, the State of Florida, Office of Financial Regulation, and the Commodity Futures Trading Commission for their assistance in this matter. 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 http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.