International Law

: Misleading Advertising Law

The Miracle Ponzi

From the FBI Press Release about the Robert Miracle ponzi

A grand jury in Seattle, Washington, has indicted ROBERT MIRACLE, MUKHTAR KECHIK, and FAHIMI FISAL in a twenty-three count Indictment charging Conspiracy, Mail Fraud, Wire Fraud, Money Laundering, and Tax Evasion. The Indictment alleges that the men operated a $65-million "Ponzi" scheme.

MIRACLE, 48, was arrested at his home in Bellevue this morning, and will be arraigned on the Indictment this afternoon at 2:30. KECHIK, 52, and FISAL, 32, both are Malaysian nationals. Warrants have been issued for the arrest of KECHIK and FISAL.

According to the Indictment, MIRACLE operated a number of companies allegedly involved in oil development in Malaysia and Indonesia, including: Laramie Petroleum, Inc.; MCube Petroleum, Inc.; Diski Limited Liability Company; Basilam Limited Liability Company; and Halmahera-Rembang Limited Liability Company. MIRACLE and his co-defendants represented to investors that these companies were making money from oil-field development and from the sale of oil-field services.

In fact, the funds of later investors were used to pay off the investments of earlier investors. Between September 2004 and October 2007, MIRACLE took in more than $65 million from investors and paid out more than $36 million in returns to investors, using funds from later investors.

The remainder of the investor monies--more than $28 million--was used in a failed effort to develop oil and gas on fields in Indonesia, as well as to pay for a lavish lifestyle for MIRACLE and his cohorts.

According to the Indictment, as part of the conspiracy, MIRACLE allegedly mislead investors both about his business background, and about the success of the companies he promoted.

MIRACLE falsely claimed to have been employed by NASA and Disney.

MIRACLE also allegedly falsely claimed that his companies actually were producing and selling oil and gas.

Between 2004 and 2007, MIRACLE issued a number of press releases and "investor updates" touting his companies' successes.

According to e-mails referenced in the Indictment, the conspirators plotted to make false financial statements, which they referred to as "simulation files," that falsely showed that the companies were producing oil and gas, and receiving revenues from the sale of that oil and gas.

MIRACLE also allegedly created false bank documents to support their fraud. As part of the Indictment the government is seeking to forfeit a two-carat diamond ring MIRACLE purchased for more than $38,000 and a painting that MIRACLE purchased in Italy for $27,000.

The Indictment also alleges that MIRACLE used investor funds to take ten of his family members on a week-long cruise at a cost of more than $77,000, and that he evaded taxes on more than $527,000 of income in 2005 by falsely classifying the money that he received from his companies that year as loans to him from the companies, rather than as salary.

The charges contained in the Indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, and the Washington State Department of Financial Institutions.

The case is being prosecuted by Assistant United States Attorneys Carl Blackstone and Andrew C. Friedman, and Special Assistant United States Attorney Tyler Letey. For additional information, please contact Emily Langlie, Public Affairs Officer for the United States Attorney's Office, at (206) 553-4110 or Emily.Langlie@usdoj.gov

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Full post as published by Misleading Advertising Law on February 06, 2009 (boomark / email).