wmlro.com: jail for Ponzi operator who stole USD21m

Miller, of San Clemente, Orange County, was sentenced Monday afternoon by United States District Judge Christina A. Snyder. Miller pleaded guilty last March to a mail fraud count related to the Ponzi scheme, as well as bribery, passport fraud, and identity fraud charges resulting from his attempt to procure a fraudulent passport and flee the country after his scheme collapsed.

From 2000 until November 2008, Miller operated a Ponzi scheme through his Newport Beach-based investment companies, JAM Jr. Enterprises and Forte Financial Partners. Miller made promises of “guaranteed” annual returns of as much as 18 percent per year, telling investors that their money would be invested in foreign currency trading, oil wells, real estate and other vehicles. During the course of the scheme, Miller provided investors with monthly account statements that falsely represented they were earning the promised returns. In fact, Miller had never earned any real profits from his investment activity and, in the pattern of a typical Ponzi scheme, used money from some investors to make Ponzi payments to other investors.

Over the course of his scheme, Miller defrauded more than 130 people out of more than USD21 million, taking millions of dollars that some victims withdrew from IRA retirement savings accounts and others borrowed against their homes.

In sentencing papers, prosecutors argued that Miller was “amongst the most egregious of any investment fraudster or Ponzi schemer this Court will ever see. He didn’t just solicit fraudulent investments through mailings or mass marketing, like many fraudsters do. He didn’t just interact with victims over the telephone or at investment seminars, like many others. [Miller] lied to people in person, up close, sitting in their living rooms or at their kitchen tables, knowing full well the vulnerability of his victims and the inevitable devastation his deceit would cause them.”

The mail fraud charge is the result of a 26 September, 2008 letter that Miller sent to investors, in which he falsely stated that investments made with him were performing well despite the economic downturn, and that his companies had more than USD150 million in assets and only approximately USD30 million in liabilities. In reality, at that point Miller and his investment companies were nearly out of money, his fraud scheme was collapsing, and he was considering fleeing the country.

Miller was taken into custody in November 2008 as he was preparing to leave the United States. The month before, Miller told a former associate that he wanted to obtain a fraudulent United States passport under a false name that he could use to flee the country, prosecutors said. Miller and the former associate discussed the countries that they thought would be best to flee to, including those that did not have extradition treaties with the United States. On 12 November, during a meeting at the Federal Building in Westwood with an undercover State Department agent whom Miller believed was a corrupt passport officer, Miller paid a USD5,000 bribe to secure a bogus passport that was to be in the name of a former high school classmate who had recently died. The USD5,000 came from money collected during his fraud scheme. After Miller completed the fraudulent passport application in the name of his deceased high school classmate and handed the undercover agent USD5,000 in cash, he was arrested by agents of the Federal Bureau of Investigation.

He was sentenced to 159 months in prison: that's just over 13 years.