Chicago Man Sentenced To 78 Months In Prison For Running Investment Fraud Scheme
SAN FRANCISCO - Michael Steven Banuelos (aka Ferrari Mike, aka Mike Banuelos) was sentenced yesterday to 6 ½ years in federal prison for running a three-year investment fraud scheme through which he fraudulently obtained approximately $2.6 million, announced United States Attorney Haag.
As part of his fraudulent scheme, Banuelos falsely claimed to be a successful promoter in the music industry with ties to various well-known recording stars. In furtherance of his fraud, Banuelos lied to the business manager of a musical group, claiming that he, Banuelos, had arranged a concert tour during which the aforementioned musical group would be the opening act for one of the well-known stars with whom he had ties. Banuelos also lied to this business manager and other investors, claiming that he had negotiated a multimillion contract with a major recording label for the rights to the music group. Banuelos also used false statements and phony documents to lure in additional investors in this purported music deal and non-existent deals regarding other musical artists. Several of the investors in these purported deals lived in the Bay Area.
Of the approximately $2.6 million dollars he obtained through this scheme, Banuelos spent the overwhelming majority of it on personal expenses. Those expenses included payments to one of his ex-wives, scores of thousands of dollars on car payments, and thousands of dollars paid for a country club membership and dues.
As his music deal scam was coming to a close, Banuelos defrauded additional individuals out of another $200,000. Banuelos falsely claimed to these victims that he was a successful money manager whom one client had entrusted with $45 million for investment. Banuelos provided false documentation of these claims, too, resulting in the victims providing more money to Banuelos in the mistaken belief it would be invested on their behalf.
Banuelos, 42, was indicted by a federal grand jury on July 12, 2012. He was charged with twelve counts of wire fraud, in violation of Title 18, United States Code, Section 1343, and one count of money laundering, in violation of Title 18, United States Code, Section 1957. He was arrested on July 26, 2012, in Chicago, where he had lived for the preceding few months. Prior to moving to Chicago, he had lived in and around Atlanta, Georgia. He has remained in federal custody since his arrest.
On February 26, 2013, Banuelos pleaded guilty to one count of wire fraud, in violation of Title 18, United States Code, Section 1343.
Doug Sprague is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Rayneisha Booth. The prosecution is the result of a one-year investigation by the Federal Bureau of Investigation.