Boca Raton Man Receives 293-Month Sentence in Multi-Million-Dollar “Ponzi” Scheme

Jeffrey H. Sloman, Acting United States Attorney for the Southern District of Florida, John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, and J. Thomas Cardwell, Commissioner, State of Florida, Office of Financial Regulation, announced that defendant Michael Riolo, 38, of Boca Raton, Florida was sentenced in connection with orchestrating a multi-million dollar Ponzi scheme. United States District Court Judge Kenneth A. Marra sentenced the defendant to 293 months imprisonment, followed by 3 years of supervised release.

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, the investor monies were used for other purposes, including Riolo’s personal use and benefit.

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 the defendant, he 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. The defendant 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.

“During these tough economic times, it is more important than ever that those who lie to and steal from the investing public be held accountable for their misconduct. The United States Attorney’s Office will continue to investigate and prosecute those who perpetrate these large-scale fraud schemes.”

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 United States 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 http://pacer.flsd.uscourts.gov.