Six indicted in Nevada accused of fraud in international investment scheme

Reuters News
Posted: Dec 16, 2013 5:27 PM

By Jonathan Kaminsky

(Reuters) - Six men from the United States and Switzerland have been indicted on suspicion of pocketing at least $5.6 million from investors who were told the cash was being put into high-yield European equities and debt offerings, the U.S. Department of Justice said on Monday.

The scam persisted for four years, ending in October, and ensnared at least 12 investors - identified in court papers only by their initials - who were bilked of amounts ranging from $200,000 to $1.2 million, the indictment said.

Three of the suspects were arrested last week, while three others remain at large, a Justice Department statement said.

The men were indicted on Wednesday by a federal grand jury in Nevada and each charged with one count of conspiracy and between 5 and 21 counts of wire fraud and securities fraud. In addition to the possibility of decades in prison and hefty fines, the men face the forfeiture of assets linked to the scheme.

The conspirators used a Swiss firm, Malom Group AG, to promote the investments, producing phony bank statements that showed large deposit balances at major European banks, the Justice Department said.

When the victims of the scheme became suspicious and demanded their money back, the defendants promised to provide refunds but never did, the indictment said. When two of the investors posted a complaint about the scheme on the website Ripoff Report, one of the men threatened to sue them if they didn't remove it, the indictment adds.

The court documents also said that four of the defendants sought to hide their proceeds by not filing tax returns with the Internal Revenue Service.

The men were identified as Anthony Brandel, 46, and Joseph Micelli, 59, who were taken into custody in Las Vegas, as well as James Warras, 67, who was arrested in Wisconsin. Still at large are Sean Finn, 44 of Montana, and Martin Schlaepfer, 55, and Hans-Jurg Lips, 50, both of Zurich, Switzerland.

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Court documents identify Schlaepfer as Malom Group AG's chief executive officer and Lips as its chairman and head of its structured finance group. Warras directed the company's U.S. operations and Finn acted as a broker who recruited victims and referred them to the others, the Justice Department said.

Micelli, a disbarred former attorney, told potential investors that he was the company's "compliance officer," and Brandel directed a related Nevada firm, MY Consultants Inc, which purported to review potential investments with the company, according to court documents.

The names of the attorneys representing the defendants were not immediately available.

The case was investigated by the FBI's Las Vegas Field Office, with the Securities and Exchange Commission conducting a parallel civil investigation. Swiss prosecutors in Zurich assisted in the investigation, the Justice Department said.

(Editing by Cynthia Johnston, Bernard Orr)