Gross Orchestrated Two Brazen Schemes That Cost His Victims Millions

ATLANTA, GA - MITCHELL GROSS, 61, of Marietta, Georgia, pleaded guilty today in federal district court to wire fraud and money laundering charges.

United States Attorney Sally Quillian Yates said, “Much like the novels this defendant wrote, the stories he told to his victims to entice them to entrust him with their money or their legal business were also fiction, but of a far more sinister nature. Setting up phony investment companies and fake lawsuits may have provided this defendant with a comfortable lifestyle for a while, but now the storyline has changed and he faces the stark reality of federal prison.”

IRS Criminal Investigation Special Agent in Charge Rodney E. Clarke said, “This case shows that the appearance of success can be a mask for a tangled web of financial lies.  Financial schemes can thrive for a time on false information about how the money is being invested and where the returns are coming from.  However, the web of lies will eventually unravel and the fraud will be exposed.  Individuals and businesses are urged to be extremely cautious when entrusting others with their hard earned money.”

According to United States Attorney Yates, the charges and other information presented in court, GROSS, who has written and published novels under the name “Mitchell Graham,” operated two separate fraud schemes.  In the first scheme, GROSS began a romantic relationship with “R.J.,” a woman he met through an internet dating service that caters to women of the Jewish faith.  GROSS told R.J. that he was independently wealthy and financially secure, 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, and “The Merrill Company” was a fictitious company.  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. 

To promote his scheme, GROSS caused phony “Merrill Company” account statements to be delivered to R.J.  R.J. wired approximately $2.99 million to an account she believed belonged to “The Merrill Company,” which was actually controlled by GROSS.  GROSS used some of R.J.’s funds to repay a former girlfriend, “J.S.,” who 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.     

In a separate scheme, which GROSS conducted simultaneously with the first scheme, he befriended an unmarried couple and held himself out as a successful lawyer and entrepeneur among other things, even though GROSS in fact had been disbarred from the practice of law by the Georgia Supreme Court in 1991 for engaging in dishonesty, fraud and deceit.  GROSS convinced the unmarried couple that he could represent them in a lawsuit arising out of the sale of the couple’s real estate business.  Over a decade, GROSS provided the unmarried couple with fake legal papers and phony court documents to lull them into believing that the lawsuit was real and progressing in their favor.  In fact, no such lawsuit existed, and the legal fees of approximately $2.2 million that they paid GROSS was used to fund his personal lifestyle and international travel.

GROSS was charged in a Superseding Criminal Information that was presented in open court today.  The criminal Information charges him with seven counts of wire fraud and seven counts of money laundering for the first scheme relating to the phony investment company; and five counts of wire fraud and three counts of money laundering for the second scheme relating to the fake lawsuit.  As part of a negotiated plea agreement with the Government, GROSS pleaded guilty to one count of wire fraud and one count of money laundering for the first scheme; and one count of wire fraud for the second scheme.  He could receive a maximum sentence of 20 years in prison and a fine of up to $250,000 for each of the wire fraud counts; and a maximum sentence of 10 years in prison and a fine of up to $250,000 for the money laundering count.  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. 

Sentencing is scheduled for May 14, at 3 p.m., before Chief United States District Judge Julie E. Carnes.

This case is being investigated by Special Agents of the Internal Revenue Service.

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 the U.S. Attorney’s Public Information 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.

 

 

 

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