Two Key West men who bilked millions of dollars from local investors in a financial scheme have pleaded no contest to felony fraud charges and will be sentenced in October.
Luis Leon and Richard Renner, who operated the Key West-based Strategic Holdings Inc., have been accused defrauding $5 million to $7 million from a group of about 20 investors who claim they were not being paid earnings or returned their principal investment upon request.
The two men pleaded no contest to felony charges of racketeering, conspiracy to commit racketeering and engage in organized scheme to defraud on Tuesday, Aug. 16, and will be sentenced by Judge Mark Jones on Oct. 14 at the Key West Courthouse. Leon also pleaded no contest to a charge of fraudulent transactions.
Between 2001 and 2017, the two operated Strategic Holdings Group LTD, a purported investment fund company that specialized in investments dealing with natural gas and other alternative forms of energy.
The state Office of Financial Regulation began investigating the company after investors sued when they could not recover their initial investments and profits made on the investments. The Office of Financial Regulation claim Leon and Renner bilked more than 20 local investors out of $7 million.
Investors allege that Leon and Renner represented themselves as sophisticated and experienced money managers who claimed they could provide access to exclusive investments in financial instruments, such as energy-related limited partnerships, real estate, tax liens, private equity, precious metals and other "alternative assets, according to lawsuits the former customers filed.
However, the investigation revealed that investor funds were not used exclusively for the purchase of financial instruments and alternative assets, according to the Office of Financial Regulation.
Instead, Leon and Renner diverted investor funds to personal accounts where they were used to pay their own expenses, including payments on mortgages and personal credit cards, or taken in the form of cash withdrawals for personal use, according to the Office of Financial [email protected]