COBB COUNTY FICTION AUTHOR INDICTED IN WIRE FRAUD SCHEME
October 6, 2011
Gross Defrauded Millions From Women Using Phony Investment Company
ATLANTA, GA - MITCHELL GROSS, 61, of Marietta, Georgia, has been indicted by a federal grand jury on charges of wire fraud and money laundering. GROSS was arraigned this afternoon, and is being detained pending his detention hearing set for tomorrow before United States Magistrate Judge Christopher Hagy.
United States Attorney Sally Quillian Yates said, “The internet has improved our ability to communicate and work more efficiently, but it also makes it simpler for those bent on defrauding others to find their next victim. This defendant allegedly met women through an online dating service and posed as someone who wanted a committed romantic relationship, but who in fact was interested in luring them into investing their savings with a phony company. The unsuspecting victims transferred millions of dollars into bank accounts controlled by the defendant, who allegedly depleted the funds to pay back previous victims and enrich himself.”
Reginael D. McDaniel, IRS Criminal Investigation Special Agent in Charge said, “The IRS, along with our law enforcement partners, will vigorously pursue those who victimize investors and violate the public trust. Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable for their actions.”
According to United States Attorney Yates, the charges and other information presented in court: GROSS met women by corresponding with them on an internet dating service that caters to individuals of the Jewish faith. In June 2006, GROSS began a romantic relationship with “R.J.,” a woman he met through the dating service. GROSS has written and published novels under the name “Mitchell Graham,” and told R.J. that he was independently wealthy and financially secure. GROSS actually has written and published books. But GROSS also told R.J. that his wealth dramatically increased as a result of the successful investment of his funds by “Michael Johnson,” supposedly a licensed stock broker employed by a subsidiary of Merrill Lynch known as “The Merrill Company.” In fact, “Michael Johnson” was an alias used by GROSS himself, and “The Merrill Company” did not exist. R.J. called a phone number provided by GROSS and spoke to “Michael Johnson.” In fact, she was speaking to GROSS, who disguised his voice to conceal the scheme. R.J. ultimately wired approximately $2.99 million to an account she believed belonged to “The Merrill Company,” which was actually controlled by GROSS.
To further promote and conceal the scheme to defraud, GROSS caused phony IRS 1099 forms to be delivered to R.J., which falsely reported dividend and interest income purportedly earned on her “Merrill Company” investment accounts. GROSS also caused phony “Merrill Company” account statements to be delivered to R.J.
Further investigation revealed that GROSS was actually using R.J.’s funds to repay a former girlfriend, “J.S.” J.S. had previously been persuaded by GROSS to invest funds totaling approximately $1.4 million with “The Merrill Company,” based on fraudulent representations similar to those GROSS made to R.J. In addition, GROSS transferred R.J.’s funds into his own personal bank accounts and used them to purchase items such as artwork, a luxury automobile, and a golf club membership.
Any person who believes they may be a victim of this scheme, or who has more information about it, should contact the IRS at 404-338-7512
The indictment charges GROSS with seven counts of wire fraud and seven counts of money laundering. The wire fraud charges each carry a maximum possible sentence of 20 years in prison and a fine of up to $250,000 each. The money laundering charges each carry a maximum possible sentence of 10 years in prison and a fine of up to $250,000 each. 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.
Members of the public are reminded that the indictment contains only allegations. A defendant is presumed innocent of the charges and it will be the government's burden to prove a defendant's guilt beyond a reasonable doubt at trial.
This case is being investigated by Special Agents of the Internal Revenue Service, Criminal Investigation Division.
Assistant United States Attorneys Steven D. Grimberg and Teresa D. Hoyt are prosecuting the case.
For further information please contact Sally Q. Yates, United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney's Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney's Office for the Northern District of Georgia is www.justice.gov/usao/gan.