Tucson couple sentenced to 5 years in prison for defrauding investors
Arizona Daily Star (Tucson)
A Tucson husband and wife who claimed they created software that would generate large financial returns for investors were sentenced to 5 years in federal prison after being found guilty by a jury of securities and wire fraud, authorities said.
Victims' losses totaled about $5 million, according to a news release from the U.S. Attorney's Office in Arizona.
On Nov. 15, Michael Feinberg, 73, and Betsy Feinberg, 80, were sentenced by U.S. District Judge James A. Soto. In addition to the prison term, both will also serve three years of supervised released when they get out of prison.
Authorities said the Feinbergs operated a company called Catharon Software Corp. They claimed to have produced "revolutionary" software called VDelta that they said would generate enormous returns for investors and philanthropists.
For nearly 15 years, authorities said the Feinbergs lured investors with false promises about the software's completion, release date and capabilities. They raised money from the sale of unregistered shares of stock in Catharon, according to an indictment in the case.
Their victims included friends and associated recruited through various community organizations in Sedona, where the Feinbergs resided at the time. The couple operated Catharon in Tucson after their home in Sedona was foreclosed on in 2013, the indictment states.
In addition to paying themselves salaries, the Feinbergs used investor money for a wide variety of personal expenses, including their home mortgage, authorities said.