United States Attorney and SEC Act Cooperatively to Shut Down Alleged Investment Fraud Scheme
|U.S. Attorney’s Office April 08, 2014|
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, announce the arrest of Joseph Signore, 49, of Palm Beach Gardens, and Paul Lewis Schumack, II, 56, of Coconut Creek, in connection with an alleged $70,000,000 investment fraud concerning the sales and marketing of a “Virtual Concierge” machine by a Jupiter-based company JCS Enterprises Inc. and TBTI Inc., formerly of Highland Beach. The Securities and Exchange Commission (SEC) sought and obtained a temporary restraining order freezing the accounts and assets of the companies in a separately-filed civil action.
According to the criminal complaint, Signore and Schumack allegedly collected approximately $70,000,000 from investors nationwide with the representation that for an approximate investment of $3,500, the investor would be guaranteed a monthly payment of $300 for three years and payments would be based on advertising revenue earned from ads sold on Virtual Concierge machines (VCMs). The criminal complaint alleges that detailed financial analysis revealed that little advertising revenue was actually received by JCS Enterprises and that, in fact, old investors were paid with new investors’ money, which is the hallmark of a Ponzi scheme. The criminal complaint alleged that TBTI served as the sales arm for JCS Enterprises.
Signore and Schumack each have been charged with conspiracy to commit mail and wire fraud, five counts of mail fraud each, and six counts of wire fraud. Each of those counts carries a maximum period of 20 years in prison, three years of supervised release, a fine of up to $250,000, and mandatory restitution.
Mr. Ferrer commended the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorneys Stephen Carlton and Ellen Cohen.
A criminal complaint is only an accusation, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
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.