The federal government is accusing a South Florida businessman of bilking gay investors in an $11 million Ponzi scheme.
George Elia, 67, who controlled International Consultants and Investment Group and several other companies in Broward County, Fla., was indicted on April 5 on one count of wire fraud, which could result in 20 years in prison if he’s convicted.
According to the indictment, from as early as October 2004, Elia solicited investors by making false assurances about the safety and soundness of their investments. The indictment alleges that the businessman assured investors that his companies had significant assets, that he engaged in day trading, that investors could immediately obtain their original investments and that Elia’s companies consistently earned high rates of return.
However, according to the indictment, Elia’s companies had substantially fewer assets than he represented, his companies paid earlier investors using investor funds from more recent investors, Elia used investor money for his personal use and Elia’s companies did not earn the rates of return he had assured investors.
The case resulted from the Southern District of Florida’s ongoing Securities and Investment Fraud Initiative, a multi-agency effort targeting criminals operating a broad range of stock and commodities frauds in the state.
“Investors should rest assured that individuals who engage in fraud and manipulate the financial system as their treasure trove will be brought to justice,” said U.S. Attorney Wifredo A. Ferrer.
“George Elia preyed on trusting investors by touting his purported investment experience and by creating fictitious account statements to create the illusion of success. …George Elia will now have to face his investors in a court of law,” said FBI agent John V. Gillies.
The SEC, meanwhile, has filed a civil case against Elia and his companies for allegedly engaging in a scheme to defraud investors, including residents of the heavily gay community of Wilton Manors, Fla. The SEC refers to Elia’s alleged focus on the gay community as “affinity fraud."
The government says the businessman took in 25 investors for as much as $11 million over the past seven years.
A Broward County judge has frozen Elia’s assets while the civil and criminal cases take their course in courts.
The FBI, in a release, announced the arrest of Elia on March 27 in Las Vegas.
However, the SEC complaint released several days later said Elia is believed to have fled the United States for Cyprus.
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