Wednesday, November 16, 2011

Man Sentenced to Prison and Ordered to Pay Over $30 Million

Miko Dion Wady, 36, of Phoenix, Arizona, was sentenced late Monday by U.S. District Judge James A. Teilborg to nine years’ imprisonment and ordered to pay over $30 million in restitution and perform 250 hours of community service. Wady previously pleaded guilty to five counts of wire fraud and five counts of transactional money laundering.

At sentencing Judge Teilborg also ordered that Wady forfeit numerous seized items, and the proceeds from the sale of additional seized items, including a 41 foot Rinker Express Cruiser boat, a Ferrari, over $100,000 held in cash and accounts, jewelry, firearms and recreational equipment including a Weekend Warrior 5th wheel trailer.

“This individual sought to profit by creating a sophisticated money laundering scheme designed to scam investors out of their money,” said Acting U.S. Attorney Ann Birmingham Scheel. “The court’s stiff sentence reflects the seriousness of his crime and this office’s resolve to prosecute individuals who profit from unsuspecting investors.”

In the course of his guilty plea, Wady admitted that he operated and had an ownership interest in various business enterprises that purportedly were engaged in the business of promoting concerts or tours of well known entertainers and artists. The enterprises included Dezert Heat Entertainment, Inc.; Dezert Heat, Inc.; Dezert Heat Worldwide, LLC; NATO Enterprises, LLC; and NATO Entertainment, LLC.

Wady admitted that he and others misled victim investors into believing that Wady entered into performance contracts and other business arrangements with nationally and internationally known entertainers, arranged performance venues throughout the world, and greatly profited by putting on these concert or tour events. Wady, with the assistance of others, falsely claimed during the period 2004 through 2007 to have promoted concerts for at least forty artists and entertainers, including many who were nationally and internationally known.

Through various entities and associates, Wady obtained victim investor funds to finance purported concerts and tours supposedly being promoted by Wady. From at least August 2004 through March 2007, Wady and associates entered into loan and event funding agreements, totaling approximately fifty million dollars, with approximately 250 victim investors. The “investments” were purportedly to finance approximately 150 concerts or concert tours “promoted” by Wady. At the time of Wady’s sentencing, approximately 240 investors and groups of investors were known to have sustained losses totaling $30,040,197.

The “investment” loan agreements victim investors entered into regularly specified that each “investment” loan was for the financing of a particular concert or tour of a designated performer. The “investment” loan terms regularly called for repayment to the victim investors within 30 days after receipt of the net concert proceeds for the designated concert or tour. Victim investors were typically promised interest rates of 4 percent per month for the first two months, and 2.5 percent per month thereafter until the investment loans were repaid.

Upon receipt of victim investor funds by associates of Wady, the associates transferred the funds to Wady for the purported financing of concert or tour events. Because Wady had no association or contractual arrangement with any of the concerts or tours, the investor funds given to Wady by his associates were never actually used as represented to the victim investors. Most of the funds were instead returned by Wady to his associates within a short period of time, typically one or two days, under the guise that these repayments represented the net proceeds from some other concert or tour that was recently completed. In essence, because no actual investments were used for the represented concerts or tours, new victim investor monies were simply used to repay old victim investors. From beginning to end, this was primarily a Ponzi scheme. The Ponzi scheme collapsed in March 2007.

From January 2004 through March 2007, Wady used no less than three million dollars of victim investor funds to pay for his lavish lifestyle. During this period, Wady purchased for himself and others, at least 30 vehicles, including a Lamborghini, Ferrari, and Bentley. Wady also purchased a $175,000 luxury boat and $800,000.00 in real estate. All of these purchases were paid from funds Wady obtained from victim investors.

The investigation in this case was conducted by the Federal Bureau of Investigation, the U.S Postal Inspection Service and the Internal Revenue Service - Office of Criminal Investigation with assistance from the Maricopa County Sheriff’s Office and the Mesa Police Department. The prosecution is being handled by Frederick A. Battista and Peter Sexton, Assistant U.S. Attorneys, District of Arizona, Phoenix.


RELEASE NUMBER: 2011-255(Wady)

Source: FBI - Phoenix, AZ Office

Former Fiesta Bowl Chief Operating Officer Indicted

A federal grand jury in Phoenix returned a nine-count indictment yesterday against Natalie Wisneski, 47, of Tempe, Ariz., for making campaign contributions in the name of another, causing false statements to be made to the federal election commission, filing false tax returns and conspiring to commit the above offenses.

The indictment alleges that Wisneski, as an officer and high-paid employee of the Fiesta Bowl, solicited campaign contributions from Fiesta Bowl employees for federal, state, and local candidates for elective office, and arranged to reimburse the employees for their contributions with Fiesta Bowl money.

Reimbursement for federal campaign contributions is prohibited under the Federal Election Campaign Act, and it also causes the political campaigns to file false information with the Federal Election Commission as to the identity of the true donor. The federal campaigns identified in the indictment have cooperated in the investigation, and no evidence suggests that the campaigns knew that the Fiesta Bowl reimbursed its employees.

The indictment also alleges that Wisneski filed false tax returns on behalf of the Fiesta Bowl when she denied in the tax returns that the Fiesta Bowl had any lobbying expenses or political expenditures. Wisneski will be summonsed to appear for her arraignment on Nov. 30, 2011, at 10:30 a.m. The overall investigation continues, and the Fiesta Bowl organization continues to cooperate with the investigation.

A conviction for conspiracy carries a maximum penalty of five years, a $250,000 fine or both. A conviction for making campaign contributions in the names of others in an amount greater than $10,000 in a single calendar year is punishable as a felony, and carries a maximum penalty of two years, a $250,000 fine or both; A conviction for making campaign contributions in the names of others in an amount between $2,000 and $10,000 in a single calendar year is punishable as a misdemeanor, and carries a maximum penalty of one year, a $100,000 fine or both.

A conviction for false statements carries a maximum penalty of five years, a $250,000 fine or both, and a conviction for filing false tax returns carries a maximum penalty of three years, a $250,000 fine or both.

An indictment is simply a method by which a person is charged with criminal activity and raises no inference of guilt. An individual is presumed innocent until competent evidence is presented to a jury that establishes guilt beyond a reasonable doubt.

The investigation has been conducted by the FBI and the Internal Revenue Service - Criminal Investigation. Federal prosecutors and agents have also worked with state of Arizona prosecutors and agents who are participating in the continuing investigation conducted by the Arizona Attorney General’s Office.

The federal prosecution is being handled by Frank T. Galati and Gary M. Restaino, Assistant U.S. Attorneys from the District of Arizona’s Phoenix Office.

Source: FBI - Phoenix, AZ Office