Federal Deposit Insurance Corporation
Office of Inspector General

Largo Man Charged in $53 Million Ponzi-Type Fraud Scheme

 

U.S. Department of Justice, United States Attorney A. Brian Albritton, Middle District of Florida

Tampa Orlando Jacksonville Ocala Fort Myers
FOR IMMEDIATE RELEASE CONTACT: STEVE COLE
March 26, 2010 PHONE: (813) 274-6136
http://www.usdoj.gov/usao/flm/pr FAX: (813) 274-6300
LARGO MAN CHARGED IN $53 MILLION PONZI-TYPE FRAUD SCHEME

Tampa, FL - U.S. Attorney A. Brian Albritton announces today that Michael Greenberg (age 50, of Largo) has been arrested and charged in a complaint with wire fraud affecting a financial institution. If convicted, Greenberg faces a maximum sentence of thirty years in federal prison.

According to the complaint, Greenberg was sentenced in 1992 to forty-six months in federal prison for wire fraud and money laundering. He was released from prison in June 1996.

According to the complaint, in April 1998, Greenberg incorporated Pure Class, Inc., in the State of Florida. The corporation was supposed to be involved in automobile dealer-related business. Greenberg, hiding behind a proxy, then obtained an automobile dealer's license without disclosing his federal felony conviction.

Greenberg allegedly defrauded more than thirty individuals, financial institutions, his own family, and the United States Small Business Association. He made false promises to induce people, businesses, and banks to give him money. Repayments were generally made out of the proceeds of subsequent investments and loans by the same or other people, businesses, and banks. By obtaining money through false statements, Greenberg was allegedly able to steal more than $53 million.

 
 

The alleged false statements made by Greenberg ordinarily involved at least one of the following:

  1. how Greenberg intended to use the money (e.g., buying inventory);
  2. the collateral involved (e.g., automobile titles and land); and
  3. the true and intended source of any repayments (i.e., not from successful sale of inventory, but instead from subsequent investments and loans).

This case was investigated by U.S. Secret Service, U.S. Immigration and Customs Enforcement, the Office of the Inspector General for the United States Small Business Administration, the Office of the Inspector General for the Federal Deposit Insurance Corporation (FDIC), and the Pinellas County Sheriff's Office (PCSO). It is being prosecuted by Assistant United States Attorney Thomas Palermo.

A complaint is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until proven guilty.

Last updated 4/20/2010
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