Chicago Man Convicted of Multi-Million-Dollar Investment Fraud Scheme
|U.S. Attorney’s Office February 26, 2013|
SAN FRANCISCO—Michael Steven Banuelos (aka Ferrari Mike, aka Mike Banuelos) pleaded guilty today in federal court in San Francisco to running a three-year investment fraud scheme through which he fraudulently obtained more than $2 million, United States Attorney Melinda Haag announced.
In pleading guilty, Banuelos admitted that he falsely told the business manager of a musical group that Banuelos had arranged a concert tour during which the musical group would open for a famous recording artist. In addition, Banuelos falsely told this business manager that Banuelos had negotiated a multi-million-dollar contract with a major recording label for the rights to the music group, and Banuelos produced phony documentation of that alleged deal. Banuelos also used false statements and phony documents to lure in additional investors in this purported music deal and other non-existent deals regarding musical artists. Several of the investors in these purported deals lived in the Bay Area.
Banuelos admitted that of the more than $2 million dollars he obtained through this scheme, he spent the overwhelming majority of it on personal expenses. Those expenses included payments to his ex-wife, scores of thousands of dollars on car payments, and thousands of dollars paid for a country club membership and dues.
Finally, Banuelos admitted that after the music deal scam ended, he defrauded other individuals out of an additional $217,000. In connection with this scheme, Banuelos falsely claimed that he was a successful money manager whom one client had entrusted with $45 million for investment. Banuelos provided false documentation of these claims, too, resulting in additional victims providing more money to Banuelos in the mistaken belief it would be invested on their behalf.
Banuelos, 42, was indicted by a federal grand jury on July 12, 2012. He was charged with 12 counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and one count of money laundering, in violation of Title 18, United States Code, Section 1957. He was arrested on July 26, 2012, in Chicago, where he had lived for the preceding few months. Prior to moving to Chicago, he had lived in and around Atlanta, Georgia. He has remained in federal custody since his arrest.
The sentencing of Mr. Banuelos is scheduled for May 21, 2013, before Judge William H. Alsup in San Francisco. The maximum statutory penalty for a violation of wire fraud, in violation of Title 18, United States Code, Section 1343, is 20 years in prison, a fine of $250,000, plus restitution. Any sentence following conviction, however, would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Doug Sprague is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rayneisha Booth. The prosecution is the result of a one-year investigation by the Federal Bureau of Investigation.