Former Miami Beach Resident Pled Guilty to $207 Million Dollar Mail Fraud Scheme
On June 10, 2016, a former Miami Beach resident pled guilty for his participation in a $207 million dollar mail fraud scheme.
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.
John Utsick, 73, formerly of Miami Beach, Florida, pled guilty to one count of mail fraud, in violation of Title 18, United States Code, Section 1341. Utsick faces a maximum statutory sentence of 20 years in prison. Utsick is scheduled to be sentenced by U.S. District Court Judge Cecilia M. Altonaga on August 23, 2016.
According to the court record, Utsick was charged by superseding indictment with mail fraud related to his operation of two entertainment companies called The Entertainment Group Fund, Inc. (“TEGFI”) and Worldwide Entertainment, Inc. (“Worldwide) from approximately January 1996 through January 2006. Utsick was extradited from Brazil to the Southern District of Florida in December 2014.
During the plea hearing, Utsick admitted that, from January 1996 through December 2005, he devised a scheme to defraud investors by making false representations regarding his concert promotion business. Utsick represented to investors that he would use their money to invest in various concerts, tours, and other entertainment opportunities, and that the investors would receive the greater of guaranteed 10% returns or shares of profits from the various concert ventures. Relying on those representations, individuals sent Utsick money to invest. Utsick provided the investors with account balance statements, purporting to show investment profits -often in the range of 10% to 30% profit.
Contrary to those representations, however, TEGFI and Worldwide lost money from 1995 through 2005, and by mid-2005, Utsick and his companies’ owed investors hundreds of millions of dollars. Utsick knew that his companies were not profitable and that he could not compensate investors as promised based on the current earnings or the assets of the companies. Nevertheless, Utsick invested millions of dollars of investor money in stock options trading. Utsick did not disclose that he intended to use the investors’ money for that purpose, that the stock option trading had nothing to do with the regular activities of Utsick’s concert promotion business, and that he had lost the majority of the investors’ money through stock option trading. Additionally, Utsick used some of the investor money for his own personal benefit and for the benefit of others, without permission or consent.
In total, based upon Utsick’s misrepresentations regarding the stability of his companies and the guaranteed return rates, the defendant obtained approximately $253,942,517 from approximately 2,928 individuals. In 2006, at the time the court-appointed receiver took over to operate Utsick’s companies, the defendant had not reimbursed investors a total of $203,477,335. Following the receivership and liquidated assets, the balance unpaid to the investors totaled $169,177,338.
Pursuant to Utsick’s plea agreement, the United States Attorney’s Office for the Southern District of Florida has agreed to recommend a sentence of 210 months in prison. Utsick has agreed that the relevant loss value is $207,185,420 and has agreed to pay restitution in the amount of $169,177,338. A final sentencing determination will be made by U.S. District Judge Altonaga.
Mr. Ferrer commends the investigative efforts of the FBI. The case is being prosecuted by Assistant U.S. Attorneys John P. Gonsoulin and H. Ron Davidson.