Former Candidate for DeKalb County Superior Court Pleads Guilty to Defrauding Investors
|U.S. Attorney’s Office September 11, 2013|
ATLANTA—Michael Rothenberg, a former candidate for a seat on the DeKalb County Superior Court, pleaded guilty today to a charge of defrauding the owners of WinterHawk Energy and Development Corporation.
“This defendant stole from investors who trusted his judgment,” said United States Attorney Sally Quillian Yates. “His fraud is particularly egregious because he was involved in defrauding investors at the very time he was seeking to be elected as a DeKalb County superior court judge and because he used a portion of the illegal proceeds to fund his political campaign. Ultimately, his fraud scheme was uncovered, and his quest to be elected ended in failure.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “Investment fraud schemes often have at their core individuals who appear very credible. These schemes often end with those individuals being revealed as greedy and uncompassionate for those devastated investors whose trust they betrayed. Today’s guilty plea will ensure that Mr. Rothenberg will be held accountable for his criminal actions.”
According to United States Attorney Yates, the charges, and other information presented in court: Michael Rothenberg, 35, of DeKalb County, Georgia, deceitfully persuaded the owners of WinterHawk Energy and Development Corporation (WinterHawk) into investing a total of $1.35 million. Rothenberg represented that the invested money would be placed in a trust account, controlled by Rothenberg, which would be used to fund the trading of notes by large financial institutions. These notes, according to Rothenberg, would be split into “tranches,” and a 10 percent profit would be earned each time a note or tranch was traded. Rothenberg told the investors that the investment involved no risk.
In fact, no investment existed, and Rothenberg used the money paid by WinterHawk to fund his political campaign for a seat on the DeKalb County Superior Court, as well as to pay personal expenses. Rothenberg ultimately was unsuccessful in his bid for a judgeship. During the scheme, Rothenberg placated the investors’ concerns and lulled them into believing that the investment opportunity was real by e-mailing them fabricated bank statements, which made it appear as if the money they had invested remained in his trust account and that Rothenberg himself was wealthy. From time to time Rothenberg returned some of the money to the investors in response to their demands and claimed falsely that he was making up for the shortfall by personally investing his own money. But Rothenberg did not invest his own money and in fact spent the remaining proceeds—approximately $800,000—without the investors’ knowledge or consent.
The charge of wire fraud in this case carries a maximum sentence of 20 years in prison and a fine of up to $250,000. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.
Sentencing is scheduled for November 18, 2013, at 10:00 a.m. before United States District Judge Steve C. Jones.
This case is being investigated by the Federal Bureau of Investigation.
Assistant United States Attorney Steven D. Grimberg is prosecuting the case. The DeKalb County District Attorney’s Office has provided valuable assistance.
For further information please contact the U.S. Attorney’s Public Affairs Office at USAGAN.Pressemails@usdoj.gov or (404) 581-6016. The Internet address for the U.S. Attorney’s Office for the Northern District of Georgia is www.justice.gov/usao/gan.