Defendant Involved in Multi-Million Dollar ‘High-Yield Prime Bank’ Scheme Found Guilty of Federal Fraud Charges
SANTA ANA, California – A Marina Del Rey man has been found guilty of federal fraud charges for participating in a “high-yield prime bank” scam by bringing in approximately $5 million from victims who were promised huge returns on investments, purportedly with little or no risk.
Mark Gelazela, who was also known as Mark Zella, 43, of Marina Del Rey, who operated IDLYC Holdings Trust, was found guilty yesterday afternoon by a federal jury of two counts of wire fraud related to the scheme.
Gelazela lured victims to invest in a scheme that claimed to be using money to lease and monetize bank guarantees. According to Gelazela, once the bank instruments were leased, a credit line would be drawn from the instruments that would then be used for trading, leading to extraordinary profits.
Once money came in from investors, Gelazela and his co-conspirators almost immediately used the money to pay themselves. In some cases, money from new victims was used to pay off older investors to keep the scheme running. When victims began inquiring about the status of payouts under the program and then began seeking the return of their capital, Gelazela lulled them with falsehoods and took steps to conceal the fraud.
The evidence presented at trial showed that Gelazela brought 18 victims into the scheme with false promises of astronomical returns on their investments.
“The victims in this case suffered losses of approximately $5 million after the defendant convinced them to invest with a series of lies,” said United States Attorney Eileen M. Decker. “This scheme was based on extravagant promises of high returns, which underscores the importance of exercising extreme caution when a deal sounds too good to be true.”
Gelazela was found guilty following a five-day trial before United States District Judge David O. Carter, who is scheduled to sentence Gelazela on December 12. At sentencing, Gelazela faces a statutory maximum sentence of 40 years in federal prison.
“Mr. Gelazela and his co-defendants solicited victims by claiming to be an international finance guru, only to lie about how investors’ money would be used, make excuses for delays in payment and convince victims to avoid cooperating with investigators,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “As is typical of Ponzi schemes, investors did not receive returns on their investments.”
Previously in this case, a co-defendant who participated in the scheme pleaded guilty. Francis Wilde, 65, of Mountain View, California, who was the chief executive officer of Riptide Worldwide Inc. and the owner of Matrix Holdings, LLC, pleaded guilty in May to wire fraud and admitted that he was involved in 26 deals that cost victims more than $6.3 million. Judge Carter is scheduled to sentence Wilde on December 5, at which time he faces a statutory maximum sentence of 20 years in federal prison.
Charges against two other defendants named in a grand jury indictment are still pending. Those defendants are Steven Woods, a 55-year-old Missouri man, who operated company called BMW Majestic, and attorney Bruce Haglund, a 65-year-old Irvine resident, who acted as an escrow “paymaster” in deals made by his co-defendants.
“Financial fraud schemes are often described as a house of cards. The underlying structure can fall apart at any time and expose the individuals responsible,” stated IRS Criminal Investigation’s Acting Special Agent in Charge Anthony J. Orlando. “IRS Criminal Investigation is proud to bring our forensic accounting skills to this joint investigation and help put a stop to this and other types of white collar crime.”
This case was investigated by the Federal Bureau of Investigation and IRS Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Daniel H. Ahn of the Santa Ana Branch Office.