MANHATTAN U.S. ATTORNEY AND FBI ASSISTANT DIRECTOR-IN-CHARGE ANNOUNCE INDICTMENT OF TWO MEN WHO ORCHESTRATED FRAUDULENT INVESTMENT SCHEME
FOR IMMEDIATE RELEASE
Thursday April 19, 2012
Preet Bharara, the United States Attorney for the Southern District of New York, and Janice K. Fedarcyk, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), today announced charges against S. GEORGE MILTER and CLIFFE R. BODDEN for participating in an investment scheme that allegedly defrauded foreign investors out of nearly $1 million. MILTER allegedly lured investors with false promises that their funds would be invested in the U.S. financial markets through a legitimate broker-dealer. Instead, MILTER and BODDEN misappropriated the money and used it to pay their own personal expenses. MILTER was arrested this morning in Manhattan and arraigned in Manhattan federal court before U.S. Magistrate Judge Debra Freeman. BODDEN was arrested today at his home in Lake Mary, Florida, and presented in federal court in Orlando, Florida.
The following allegations are based on the Indictment unsealed today in Manhattan
MILTER held himself out as the Chief Executive Officer of Lempert Brothers International U.S.A., a registered broker-dealer in Manhattan, and President and CEO of Lempert Capital Management, Ltd., a corporation purportedly incorporated in the Cayman Islands. BODDEN held himself out as a Managing Director of Lempert Capital.
Starting in approximately 2005, MILTER lured foreign investors into sending at least $946,509 to bank accounts that he controlled under the pretense that those funds would be invested in the U.S. financial markets by a registered broker-dealer, Lempert Brothers, through its purported management company, Lempert Capital. To induce investors into wiring funds, MILTER falsely told them that the funds would be safeguarded and that if the value of the funds dropped more than 20%, the money would be frozen with all remaining funds available for return to investors.
In fact, MILTER and BODDEN misappropriated the investors’ funds, and used the money for their personal use. They also transferred the investors’ money to a member of MILTER’s family and to entities affiliated with BODDEN.
To keep the scheme going, MILTER and BODDEN sent fraudulent monthly account statements to the investors. These statements falsely reflected that their funds were invested and earning substantial income. When investors attempted to withdraw funds from their accounts, MILTER and BODDEN made additional false and fraudulent representations as to why the funds could not be returned when requested. For example, they falsely told investors that their money was illiquid because it had been invested in various companies that had not yet gone public.
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MILTER, 33, of New York, New York, and BODDEN, 48, of Lake Mary, Florida, are each charged with one count of conspiracy to commit wire fraud and one count of wire fraud. Each count carries a maximum sentence of 20 years in prison. The Indictment also includes allegations seeking forfeiture of the proceeds of, and property involved in, the charged crimes, including at least $946,509 in United States currency.
The case has been assigned to U.S. District Judge Barbara S. Jones.
Mr. Bharara praised the investigative work of the FBI.
This prosecution is being handled by the Office's Complex Frauds unit. Assistant U.S. Attorney Carrie H. Cohen is in charge of the prosecution.
The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.