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.