downingtown Man Charged With Defrauding Investors Of Over $2 Million In Ponzi Scheme
An indictment was unsealed today charging Istvan Merchenthaler a/k/a “Steve Merchenthaler,” 42, of Downingtown, Pennsylvania, with four counts of wire fraud, one count of aggravated identity theft and two counts of money laundering, announced United States Attorney Zane David Memeger.
According to the indictment, from at least about May 2006 to about September 2011, 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 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.
If convicted of all charges, Merchenthaler faces a maximum possible sentence of 102 years imprisonment, a three year period of supervised release, a $1.75 million fine, and a $700 special assessment. Merchenthaler also faces a mandatory minimum of two years imprisonment.
The case is being investigated by the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation Division. Additional assistance was provided by the Downingtown and Uwchlan Police Departments. It is being prosecuted by Assistant United States Attorney Vineet Gauri.
UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525