Michael R. Casey, a Fort Lauderdale, Florida attorney, was arrested Wednesday after he allegedly participated in an online scheme that defrauded investors out of millions of dollars, a press release by a federal prosecutor says. Two others purportedly involved in the fraud, James C. Howard and Louis N. Gallo of Parkland, were also arrested. Casey, 65, is facing multiple charges, including nine counts of fraud; Howard, 53, and Gallo, 43, are both facing similar charges. It is unclear whether any of the defendants has qualified for bail bond or retained private criminal defense lawyer.
Reports say the fraud originated from an online investment site called “Commodities Online.” Howard and his associate Gallo supposedly ran the company behind the site. Investigators say that Casey, who had served the community as an attorney for 36 years and worked at several law firms, served as the front man for the online investment scheme.
According to investigative reports, Commodities Online purportedly offered the opportunity to invest in the trade of goods, such as iron ore, sugar, and fish. The investment firms reportedly told investors that they could expect earnings of as much as 33% of their original investment. Over time, Commodities Online gathered what investigators believe was an excess of 700 investors, some of whom discovered the company during public conferences at a hotel in Fort Lauderdale.
Detectives say that the investors’ accounts with the Commodities Online website showed that they were earning money from investments. In reality, however, the company only carried out a small portion of the agreed transactions, detectives says. Instead, the company was allegedly drawing off millions of dollars from the unsuspecting investors.
Howard and Gallo has reportedly both been convicted of felonies in the past. According to reports, Howard was convicted of conspiracy to distribute cocaine and possession of a firearm while trafficking drugs and served four years in a federal prison. Gallo was also on federal probation for committing bank fraud, detectives say. Investigators claim that none of the investors was made aware of Howard and Gallo’s prior felony charges, although disclosing felonies is not normally required for these types of transactions.
The U.S. Securities and Exchange Commission cracked down on the fraudulent company in April of 2011, reports say. By that time, however, Commodities Online had already moved a reported $3.8 million dollars in funds overseas, records indicate. In a civil lawsuit filed against the trio of alleged fraudsters, the SEC claimed Commodities Online had earned a total of $27.5 million during their operation.
Reports indicate that Gallo is already serving a six-month sentence in a federal prison for probation violation for assisting Howard and Gallo in the investment scheme. If convicted of the charges, the alleged suspects could face a maximum sentence of 20 years behind bars, reports say.
The charges did not stop with the aforementioned trio. Prosecutors also announced the indictment of Patricia Saa of Naples, Florida and Rita E. Balbirer of Pompano Beach, who have been accused of laundering money for Commodities Online. Balbirer was arrested Wednesday for her involvement in the alleged laundering. Saa was not arrested, but still faces incarceration as the investigation moves forward.