Trio facing charges of bank fraud, investment fraud in Miami

A Hialeah jeweler and two Miami-Dade residents are facing additional charges in a $40 million Ponzi scheme, The Miami Herald reported.

The trio is accused of bank fraud and investment fraud in South Florida. Our Miami defense lawyers continue to report numerous cases in which business owners, real estate agents and investment managers are accused of fraud in the wake of the economic downturn. In some instances, they may be guilty of nothing more than making bad investments or sustaining heavy losses as the market collapsed.

In this case the 38-year-old jeweler, his 61-year-old accountant and a 29-year-old loan officer have been charged with conspiracy to commit bank fraud in a $12 million scheme, according to an indictment filed this week by the U.S. Attorney for the Southern District of Florida. As we reported last month on our Miami Criminal Attorney Blog, the jeweler has previously pleaded not guilty to charges accusing him of operating an investment scam that victimized 35 people.

Investigators now allege the three defendants also submitted false loan applications to Wachovia Bank, in order to obtain $12 million in commercial lines of credit. The bank suffered a $10 million loss.

The indictment alleges that the accounted submitted an application with false information about business income, assets and accounts receivable. The loan officer for the bank allegedly participated in the scam and assisted the accountant in winning approval. The jeweler also assisted in recruiting borrowers, according to the indictment.

The jeweler already faces fraud charges brought by the Securities and Exchange Commission. In exchange for investing in his jewelry business, he is accused of offering clients dividends of 18 percent to 36 percent, payable in monthly installments. Instead, investigators say he spent the money lavishly on luxury cars, clothes and fancy diners.

All three men face up to 30 years in prison if convicted. All three are also facing a civil lawsuit. The plaintiffs in that case allege they were duped into committing securities fraud; one victim reportedly lost $2 million.