Sarasota Man Sentenced to 10 Years for Investment Fraud
|U.S. Attorney’s Office November 28, 2011|
TAMPA, FL—U.S. Attorney Robert E. O’Neill announces that U.S. District Judge Susan Bucklew today sentenced John S. Morgan (52, Sarasota) to 10 years and one month in federal prison for conspiring to commit wire fraud and engaging in money laundering. In addition, the court also ordered Morgan to forfeit a 2003 Fountain Lightning Fever Powerboat and entered a money judgment in the amount of $10,085,375, the proceeds of the offenses.
John S. Morgan pleaded guilty on June 15, 2011 pursuant to a plea agreement.
According to the plea agreement, from about March 2005 through August 2009, John S. Morgan, Marian I. Morgan, his wife, and others perpetrated an investment fraud scheme through a Danish entity named Morgan European Holdings APS (“MEH”), which the Morgans had formed. MEH was purportedly in the business of investments commonly called “prime bank instrument trading programs.” John Morgan and others falsely represented to investors that MEH trading programs would yield returns of 30-70 percent per month or 200 percent per 90-120-day period, and that the investors’ funds would never be put at risk. Morgan and others explicitly promised investors that their funds would be held in escrow in a Danske Bank account for MEH and maintained by Danish attorney Eli Hecksher, who has been charged as a co-conspirator in the scheme. Instead of safeguarding the investors’ funds in escrow, John Morgan and others disposed of the funds by: 1) paying fees and expenses associated with the fraud; 2) providing refunds of principal to select investors; and 3) stealing and converting monies for their own personal benefit. When investors did not receive the promised investment returns, and became concerned about the trading program, John Morgan and others provided a litany of excuses, assuring the investors that their funds were still on deposit and that the delays were caused by circumstances beyond their control.
In all, John Morgan and others caused investors to transfer more than $28 million to MEH accounts. Approximately $10.8 million of this total was then used by the Morgans for their personal benefit. John and Marian Morgan used investors’ funds to purchase a waterfront residence and adjoining lot in Sarasota, to fund extensive renovations on a second Sarasota residence, and to purchase or lease several luxury automobiles, including a Maserati and two Jaguars. More than eighty investors located throughout the United States, Canada, and Europe entrusted the Morgans with their funds.
Marian Morgan was found guilty of all charges in the indictment on September 29, 2011 after a four-week trial. She faces sentencing before Judge Bucklew on December 20, 2011.
This case was investigated by Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation Division. The Danish National Police also provided assistance in the investigation. The case was prosecuted by Assistant United States Attorneys Cherie L. Krigsman and Robert T. Monk.