Downingtown Man Faces Additional Charges Related to Alleged Ponzi Scheme
|U.S. Attorney’s Office March 07, 2013|
PHILADELPHIA—Istvan Merchenthaler, 42, of Coatesville, Pennsylvania, was charged today in a superseding indictment with seven additional counts stemming from an alleged investment fraud scheme. Merchenthaler is now charged with a total of four counts of wire fraud, two counts of aggravated identity theft, four counts of money laundering, two counts of filing false tax returns, and two counts of interstate transportation of stolen property, announced United States Attorney Zane David Memeger.
According to the superseding indictment, from at least about May 2006 to about February 2013, Merchenthaler claimed to be the founder of PhoneCard USA, a company that was purportedly a “premier distribution source” for prepaid phone cards and cell phones. In reality, Merchenthaler operated a Ponzi scheme, stealing over $2 million from over 200 investors and using much of these funds for his own benefit and to perpetuate his scheme.
Merchenthaler, who used a number of aliases, approached investors and persuaded them to make investments in PhoneCard USA. In his marketing materials, Merchenthaler claimed that these investments would finance the “exponential growth” of PhoneCard USA and would provide investors with “generous returns” on their investments.
In addition, Merchenthaler falsely claimed that PhoneCard USA had “lucrative contracts” with major retail chain stores “covering territories that span the east coast.” In these materials, and in his communications to investors, Merchenthaler falsely claimed PhoneCard USA had contracts with these major retail chain stores, including Walmart, 7-Eleven, and BJ’s Wholesale Club. In reality, Merchenthaler had no such contracts with these major retail chain stores. Further, Merchenthaler falsely claimed to have friendships with executives at Walmart and 7-Eleven.
According to the superseding indictment, Merchenthaler stole two cars from dealerships while on pretrial release. Merchenthaler is now in federal custody.
If convicted, the defendant faces a maximum possible sentence of 170 years of imprisonment, a $3.5 million fine, three years of supervised release, and an $1,400 special assessment. Merchenthaler also faces a mandatory minimum of two years’ imprisonment.
The case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation Division. It is being prosecuted by Assistant United States Attorney Vineet Gauri.