Attorneys give closing arguments in Kentucky securities fraud trial
Messenger-Inquirer (Owensboro, KY)
Sep. 7—Prosecutors and defense attorneys gave closing arguments Tuesday in a federal fraud trial in which the defendants are accused of running a pyramid scheme that raked in millions of dollars.
Richard G. Maike, of Owensboro, was charged with securities fraud and mail fraud, along with co-defendants Doyce G. Barnes and Faraday Hosseinpour, for allegedly taking funds from people prosecutors say believed they were buying into an online casino and investing into social media and music platforms.
Maike is also facing charges of tax evasion and money laundering. Another defendant, Richard J. Anzalone, pleaded guilty earlier this year in exchange for testifying at trial. Two other defendants are awaiting trial.
The federal complaint alleges Maike spent $12 million in investor funds between June 2013 and September 2014 and that the other defendants also made money from inducing others to buy into the businesses.
In her closing, Assistant U.S. Attorney Marisa Ford told jurors the company, Infinity 2 Global, or I2G, generated revenue by selling "packages" that let people buy into the company. Commissions were generated by getting people to purchase the packages.
"All the the revenue was generated from the recruitment fees," Ford told jurors. The products the company claimed to sell made no money, Ford said.
"The discussions were always about, 'get someone to buy into your company,' " when I2G officials talked with people, Ford said.
By July of 2014, the company had raised about $30 million, Ford said.
The securities fraud charge against Maike, Barnes and Hosseinpour stems from allegedly knowingly trying to defraud people, Ford said.
The victims felt like they were buying shares in a corporation, Ford said. "These people thought they were investing (funds) into a business." The mail fraud charge stems from people sending cashiers checks to Maike's home in Owensboro.
Maike allegedly laundered money by moving I2G funds, which Ford said were proceeds from crime, to a company he also owned in Hong Kong, and then back to the United States to purchase land in Kansas. The tax evasion charge against Maike comes from him allegedly trying to cover up the transfer of funds as a loan, to prevent paying taxes, Ford said.
"The reasonable inference is these (loan documents) were created after Mr. Maike became aware the United States was investigating" the company and the land purchase, Ford said.
Solomon Wisenberg, one of Maike's attorneys, argued federal prosecutors hadn't proved their case.
"The question isn't whether you approve of Richard Maike's business practices ... The question is whether the government has proved its case beyond a reasonable doubt," Wisenberg said. He called the federal case "a kitchen sink indictment," where prosecutors brought every potential charge.
Wisenberg said Maike never claimed people were investing in I2G, and he said people contacted during the investigation were "indoctrinated" by the FBI against Maike.
Maike never promised the online casino would make a profit, Wisenberg said. But Wisenberg said the casino, social media platform I2G Touch and music platform were actual products that Maike believed would be successful.
"The evidence shows the Touch was a real product," Wisenberg said. "The technology behind it was valuable and people wanted it."
The programs had major errors, and the music platform was fraudulently marketed, the federal indictment says.
Wisenberg said Maike's plans for the company's products were "brought down by bad timing," crackdowns on online casinos, people who couldn't make the software products work and the news of the FBI investigation, which caused the company to fold.
R. Kenyon Meyer, Barnes' attorney, said of the 10 witnesses the government put on the stand during the weeks-long trial, "not one person thought they bought an Emperor package because of a lie." The Emperor package cost $5,000.
"They bought because they wanted to share in the profits of the casino," Meyer said.
Closing arguments continued Tuesday evening in U.S. District Court.