Florida Man Pleads Guilty In Manhattan Federal Court To Engaging In A Fraudulent Investment Scheme
FOR IMMEDIATE RELEASE
Wednesday, September 12, 2012
Preet Bharara, the United States Attorney for the Southern District of New York, announced that CLIFFE R. BODDEN pled guilty today in Manhattan federal court to participating in an investment scheme that defrauded foreign investors out of nearly $1 million. As part of the scheme, BODDEN lured investors with false promises that their funds would be safely invested in the U.S. financial markets through a legitimate broker-dealer. Instead, BODDEN misappropriated the money and used it to pay his own personal expenses. BODDEN pled guilty before U.S. Magistrate Judge Debra Freeman.
Manhattan U.S. Attorney Preet Bharara said: “Duping investors into putting their money into fraudulent schemes is a crime, whether the victims reside in the U.S. or overseas, and as today’s plea demonstrates, those who do it will be prosecuted, regardless of their victims’ locations or citizenship.”
According to the allegations in the Indictment and statements made during BODDEN’s plea allocution today:
BODDEN held himself out as a Managing Director of Lempert Capital Management, Ltd., a corporation purportedly incorporated in the Cayman Islands. His co-defendant, S. George Milter, held himself out as the Chief Executive Officer of Lempert Brothers International U.S.A., a registered broker-dealer in Manhattan, and as the President and CEO of Lempert Capital.
Starting in approximately 2005, BODDEN and Milter lured foreign investors into sending nearly $1 million to bank accounts that they controlled under the pretense that those funds would be invested in the U.S. financial markets by Lempert Brothers, a registered broker-dealer, through its purported management company, Lempert Capital. To induce investors into wiring funds, BODDEN and 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 and all remaining funds available for return to investors. In fact, BODDEN and Milter misappropriated the investors’ funds and diverted 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, BODDEN and Milter sent fraudulent monthly account statements to their investors. These statements falsely reflected that their funds were invested and earning substantial income. When investors attempted to withdraw funds from their accounts, BODDEN and Milter 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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BODDEN, 48, of Lake Mary, Florida, pled guilty to one count of conspiracy to commit wire fraud and one count of wire fraud. He faces a maximum sentence of 40 years in prison (20 years on each count), and will be sentenced by U.S. District Judge Barbara S. Jones at a later date. In addition, BODDEN has agreed to a money judgment of $946,509 representing the amount of the crime proceeds.
The charges against Milter, 33, of New York, New York, are pending. These charges and the allegations against him are merely accusations, and Milter is presumed innocent unless and until proven guilty.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Carrie H. Cohen is in charge of the prosecution.