Broward County Resident Charged with Wire Fraud, Mail Fraud, and Money Laundering Relating to Dragon-Click Investment Fraud Scheme that Targeted the Elderly
Isaac Grossman, 45, of Parkland, Florida, was arrested today on wire fraud, mail fraud, and money laundering charges, for allegedly directing an elder fraud scheme involving the sale of stock in Dragon-Click Corp, a South Florida-based technology company announced Ariana Fajardo Orshan, U.S. Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge of the FBI’s Miami Field Office.
Grossman was charged by an indictment, that was unsealed today, with conspiracy to commit mail fraud and wire fraud, in violation of Title 18, United States Code, Section 1349; mail fraud, in violation of Title 18, United States Code, Section 1341; wire fraud, in violation of Title 18, United States Code, Section 1343; conspiracy to commit money laundering, in violation of Title 18, United States Code, Section 1956(h); and money laundering, in violation of Title 18, United States Code, Section 19567 (Case No. 19CR60300). If convicted, the defendant faces a maximum statutory sentence of up to 20 years in prison for each fraud count, and up to 10 years in prison for each money laundering count.
According to allegations in the indictment, from Sept. 2014 through April 2018, Grossman raised approximately $2.4 million in investor funds for a company he was president of, Dragon-Click Corp. Grossman solicited investments from dozens of individuals across the country, most of whom were elderly retirees. Grossman told potential investors that Dragon-Click was developing an internet application that would revolutionize internet shopping, by allowing a user to upload a photograph of any item the user wanted to purchase, identify all retailers offering that item for sale, provide price comparisons for that item across retailers, and provide a link to retailers’ websites where the user could purchase the item. Grossman is alleged to have solicited funds by falsely telling potential investors they would double, triple, or quadruple their investments, and that Dragon-Click was on the verge of being sold to a large technology company, such as Google, Apple, or Amazon, for over $1 billion. Grossman is also alleged to have falsely told investors that their investment money would be used to complete the technological development of the Dragon-Click internet application, to pay legal fees related to the patent application process, and to close the sale of the application to a large technology company. Rather than using investors’ money for any legitimate business purpose for Dragon-Click, it is alleged that Grossman was misappropriating investors’ funds for his own personal use.
Specifically, Grossman is alleged to have spent at least $1.3 million of investors’ money on gambling, diamond jewelry, luxury cars, tuition payments for his children’s private education, and other personal expenditures. Among other unlawful transactions, the indictment alleges that Grossman spent $35,000 of investors’ funds on a 4.81 carat diamond ring, $21,200 for a lease payment on a McLaren MP4-12C, $36,500 to purchase a Chevrolet Corvette, and $34,500 to partially pay off his home mortgage.
The indictment further alleges Grossman fraudulently concealed from investors that, prior to raising funds for Dragon-Click, he had been permanently barred by the Financial Industry Regulatory Authority (“FINRA”) from acting as a broker-dealer or associating with any broker-dealer firm, and that the U.S. Commodity Futures Trading Commission (“CFTC”) had imposed permanent registration and trading bans on Grossman, and had ordered him to pay restitution in the amount of $121,665.75.
U.S. Attorney Fajardo Orshan commended the investigative efforts of the FBI’s Miami Field Office. She also thanked the SEC’s Miami Regional Office for their assistance, as they had filed a parallel civil enforcement action against Grossman. See SEC v. Isaac Grossman, et al., Case No. 18-61234-CV-BB (S.D. Fla.). This case is being prosecuted by Assistant U.S. Attorney Michael B. Homer.
An indictment is a charging instrument containing allegations. A defendant is presumed innocent unless and until proven guilty in a court of law.