Miami computer company implicated in federal investment fraud case

The owner of a Miami Internet broadcasting company has been charged in an investment fraud scam that led to 13 arrests in Manhattan Wednesday, Business Week reported.

Those facing criminal charges in connection with investment fraud in Miami, or those victimized by investment scams, should contact an experienced law firm to discuss their rights. As we continue to report on our Miami Criminal Attorney Blog, more fraud cases are being exposed as a result of the economic downturn. And authorities are becoming more aggressive in accusing business executives of committing investment crimes.

The arrests, including an alleged member of the Bonanno organized crime family, followed a garment district raid on West 36th Street in Midtown Manhattan, where authorities say an illegal “boiler room” operation had been in operation for a decade. The operation, alternately called Powercom Energy Services Corp and Empire Energy Services Corp., solicited more than $12 million from investors. Money was solicited to purchase stock in Realcast Corp., a Miami-based computer broadcasting company, according to Business Week.

Boiler rooms typically involve high-pressure sales tactics, usually by telephone, to would-be investors. In this case, the owner of Realcast was arrested in Miami and also indicted on federal criminal charges, according to the Wall Street Journal.

Federal prosecutors contend many of the investors were elderly and were not able to check on the claims made by solicitors. Despite false claims made to investors during the last decade, the company has generated “minimal” revenue, most of which went to pay commissions to the Manhattan sales operation, according to authorities. The government alleges the Miami company paid a 50 percent commission on a $700,000 investment as recently as March.

The defendants are charged with conspiracy, securities fraud and wire and mail fraud. The charges carry up to 20 years in prison if convicted. The Miami man was scheduled to appear in federal court in Miami. The Wall Street Journal reported that the Miami defendant described himself in some company filings as a former employee of the Securities and Exchange Commission. The SEC declined to comment.

Realcast Corporation’s website was not operational on Thursday.