Vice-President Of Investment Company Sentenced In $21 Million 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, announce that Louis N. Gallo, III, 45, of Parkland, the Vice-President of Commodities Online LLC (COL), was sentenced yesterday for his participation in a $21 million investment fraud scheme.
U.S. District Judge Joan Lenard sentenced Gallo to 168 months in prison, to be followed by three years of supervised release. Judge Lenard also ordered Gallo to pay restitution of $19,919,994 to victims of the fraud scheme involving COL as well as a successor company. In addition, the sentence included a criminal forfeiture money judgment of $21,631,466, and forfeiture of Gallo’s interest in a car, two bank accounts and three properties.
Gallo pled guilty on August 8, 2014 to one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349. According to court documents, Gallo conspired with co-defendants James C. Howard, III, Patricia S. Saa, Michael R. Casey and others to defraud individuals who invested in COL. From approximately January 2010 through April 2011, Howard and his co-conspirators used material false and fraudulent representations and material omissions to obtain over $21 million from over 700 investors. The COL investors lost $18,919,994.
According to court documents, Gallo and his co-conspirators offered investors the opportunity to participate in funding certain purported “pre-sold” commodities contracts. Gallo and his co-conspirators represented to investors that COL had a track record of profits. However, COL did not have profits. Any payments made to investors were made using funds received from newer investors.
Also according to court documents, Gallo and his co-conspirators also caused material misrepresentations to be made about the leaders of COL. Gallo and his co-conspirators represented to investors that the President of COL was an attorney, co-defendant Michael R. Casey. However, the founder, co-defendant James Howard was in charge. Also, Gallo and his co-conspirators did not disclose to investors that both Gallo and Howard had previously been convicted of federal felonies and that Gallo was still serving a term of supervised release.
According to court documents, Gallo and his co-conspirators also made material misrepresentations and omissions about the misuse of funds that COL received from investors. For example, Gallo caused at least $2.5 million to be diverted for himself and his family.
Also according to court documents, after COL was taken over by a court-appointed Receiver, Gallo participated in a similar scheme involving Global Solutions and Acquisitions LLC (GSA). Approximately 50 individuals invested about $1.1 million in GSA. The GSA investors lost about $900,000.
Mr. Ferrer commended the investigative efforts of the FBI. This case was prosecuted by Assistant U.S. Attorneys Ana Maria Martinez and John P. Gonsoulin.
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 http://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 http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.