Eight Additional Individuals Charged In NFL-Related Securities Fraud Scheme Targeting The Elderly
Eight additional individuals were indicted for participating in a securities fraud scheme that targeted the elderly.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, Federal Bureau of Investigation (FBI), Miami Field Office, made the announcement.
David Anthony Eratostene, 53, of Miramar, Florida, Christopher J. Borgo, 41, of Boca Raton, Alan D. Messina, 54, of Sunrise, Michael T. Angeletti, 33, of Sunrise, Michael J. Calash 34, of Boca Raton, Stephen R. Reynolds, 38, of Pompano Beach, Gary X. Schultz, 55, of Miramar, Chazon Stein, 36, North Miami Beach, were charged with conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349, and wire fraud, in violation of Title 18, United States Code, Section 1343.
“Securities fraud schemes that target members of our community jeopardize our personal investments and security. Our Office, in collaboration with the FBI, strives to prevent the victimization of our elderly residents. By combatting these invasive fraud schemes, we help to protect potential victims from losing their hard-earned money to telemarketing thieves,” stated U.S. Attorney Wifredo A. Ferrer.
According to allegations contained in the indictment, the defendants pressured investors into purchasing stock in two companies, Thought Development Inc. (TDI) and Virgin Gaming. TDI was a Miami Beach-based company that claimed its signature invention generated a green laser line on the football field visible in the stadium to players, fans as well as on television. TDI represented that use of its technology would decrease the time used by officials to determine first downs, freeing up broadcast time that could then be sold to television advertisers. The defendants raised approximately $2.4 million through the use of call rooms that targeted more than 200 investors throughout the nation, who were told that an initial public offering (IPO) in TDI was imminent and that their money would be safe and used to develop the ground-breaking technology. Instead, the indictment alleges, that the IPO was not forthcoming as promised, and at least 50 percent of the offering proceeds were retained by the defendants or paid to sales agents through undisclosed, exorbitant commissions and fees. The defendants also lured investors by misrepresenting that TDI’s technology was about to be used by the NFL. The defendants also neglected to tell investors the TDI laser technology posed a potential risk of blindness to players on the football field.
The indictment alleges that the second fraudulently sold stock, for Virgin Gaming, a subsidiary of Virgin Media, Inc., provided a fee-based service that facilitated online tournaments, fantasy sports leagues, and competitive online gaming. The Virgin Gaming scheme took one of two forms. In some instances, sales agents told investors they would be investing in a company that had obtained the right to purchase shares of Virgin Gaming stock. The defendants told investors those shares would be converted into shares of Virgin Gaming just prior to an IPO. However, this was not a true representation as no such option to buy Virgin Gaming stock, in fact existed. On other occasions, sales agents told investors that they were directly purchasing Virgin Gaming stock when in fact they were not. The defendants’ sales agents also lied about guaranteed returns on investments and the timing of the purported IPO. Over the course of the scheme, the defendants caused approximately thirty-five individuals to purchase the non-existent Virgin Gaming stock and thereby made approximately $325,000 in fraudulent sales. Nearly all of the monies were misappropriated as undisclosed commissions and fees.
This indictment relates to a case filed a year ago, United States v. Kirschner, et. al, 14-20514-CR-Gayles. All four defendants in that matter, the leader/organizers of the TDI fraud scheme discussed above, pleaded guilty and have been sentenced.
Mr. Ferrer commended the investigative efforts of the FBI. This case is being prosecuted by Assistant United States Attorney Roger Cruz and Department of Justice, Antitrust Division, Trial Attorney, Kevin B. Hart.
An indictment is only an accusation and a defendant is presumed innocent unless and until proven guilty.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.