Federal prosecutors announced the case closed on investment fraud schemes that took $23 million from 700 people across the country, targeting elderly and unsophisticated investors with pitches about backers like an ex-Apple Inc. CEO, they said.
U.S. District Judge Marcia G. Cooke in Miami sentenced Craig Sizer, 49, of Miami to 15 years in prison Wednesday after he pleaded guilty to conspiracy to commit wire and mail fraud, prosecutors announced.
Acting U.S. Attorney Benjamin Greenberg of the Southern District of Florida and FBI Special Agent in Charge George Piro of the Miami field office detailed the case in a joint announcement Friday. They said that from April 2009 to August 2015, Sizer and his co-conspirators, who have already pleaded guilty, used false and fraudulent claims to solicit investors all over the country to buy shares of stock in Sanomedics International Holdings, a company that sold noncontact infrared thermometers for home health care and for dogs.
Sales agents used pitches that included false statements including that stock sales did not include commissions or fees, sales agents were compensated with stock or paid by the hour, the stock could be sold after six months, the sales agents worked directly for Sanomedics, stock purchases were safe and secure, and famous and wealthy people such as former CEOs of Apple, PepsiCo and IVAX Corp. and the "Dog Whisperer" were either heavily invested in the company or were company representatives.
The prosecutors said that in truth, the sales agents worked for Sizer's co-conspirators in two boiler rooms, not for Sanomedics. Investors were never able to sell their stock. About 90 percent of investor proceeds were misappropriated by the co-conspirators to cover commissions and fees. Sales agents were not paid by the hour and did not receive stock options but were in fact paid hefty commissions. Additionally, they had no real endorsements from celebrities or wealthy individuals. As a result of the scheme, the co-conspirators defrauded over 700 people out of approximately $21 million.
Also, from approximately August 2014 to August 2015, prosecutors said Sizer and some of the same co-conspirators used a similar fraud scheme to sell shares of stock in Fun Cool Free, a company that claimed to own a smartphone gaming portfolio with over 500 gaming applications. The co-conspirators used false claims, including assertions that they worked directly for the company and it was partners with Apple, to defraud over 70 other investors out of $1.5 million.
This case was prosecuted by Assistant U.S. Attorney Roger Cruz and trial attorneys Ryan Tansey and Kevin Hart from the antitrust division of the U.S. Department of Justice.