facebooktwitterRSS
- Advertisement -
  • Most Commentedmost commented up
  • Most Emailedmost emailed up
  • Popularmost popular up
- Advertisement -
 

« News Home

Florida men plead innocent in $14M Ponzi case



Published: Wed, July 13, 2011 @ 12:04 a.m.

photo

David Olson

photo

Edward Allen

By Peter H. Milliken

milliken@vindy.com

YOUNGSTOWN

Two men pleaded innocent in federal court here to all 30 counts in an alleged $14 million Ponzi scheme, which solicited Youngstown-area investors.

Edward A. Allen, 35, and David L. Olson, 60, both of Lakeland, Fla., entered their pleas Tuesday during their arraignment before U.S. District Judge Benita Y. Pearson,

A federal grand jury indicted Allen and Olson on charges of conspiracy, securities, mail and wire fraud, and money laundering, with the reported offenses occurring between 2006 and 2009.

The indictment said Allen and Olson were partners in A&O Companies, which solicited investors in the Youngstown area and from Florida, Texas and Arizona.

Investors were told A&O’s purpose was to buy residential real estate and sell it at a profit, said U.S. Attorney Steven M. Dettelbach.

In fact, the investments were used to pay company employees’ salaries, personal expenses and purported interest payments to various investors and mortgage payments on real estate purchased on behalf of A&O by investors, the indictment says.

Allen and Olson promised investors a high rate of return, in one case up to 45 percent, through monthly interest payments and gave them promissory notes totaling $14 million, the U.S. attorney said.

One of the alleged victims, Robert Perry, 58, of Lowellville, who attended the arraignment, said after court the failure of his investments with Olson have cut his actual retirement income to half what he anticipated when he took early retirement as a steelworker at 55 based on Olson’s promises.

Perry, who began investing with Olson in 2002, said the monthly interest payments he was promised in a self- directed individual retirement account stopped after six months.

“We were friends since we were teenagers,” Perry said of himself and Olson. “Two days before I retired, I said, ‘Are you sure everything’s fine?’ He said, ‘Quit worrying about it,’” Perry recalled.

“Mr. Olson regrets and is sincerely sorry that his friends and family lost their hard-earned money,” said a prepared statement from Carlos Warner, an assistant federal public defender representing Olson.

“He looks forward to telling his side of the story. He hopes his criminal case helps give closure to those who lost money. Most importantly, he remains dedicated to helping those who lost so much,” Olson’s statement continued.

After reading Olson’s statement, Perry’s reaction was: “I’ve been friends with him for 40-some years, and, when all this happened, not even a phone call, not even, ‘Hey, you know, I ran into hard times.’”

The defendants told investors the notes were collateralized by Olson’s Florida lakefront property, according to the indictment.

That property, purchased for about $425,000, declined substantially in value after a sinkhole developed and drained the lake in 2006, yet about $8 million in notes were collateralized by this property, the indictment says.

In the alleged Ponzi scheme, A&O paid some investors purported interest payments derived from other investors’ funds, the U.S. attorney said.

U.S. marshals arrested Allen and Olson last month in Florida. The defendants are free on $75,000 bond each.

The case was investigated by the FBI and the IRS and is being prosecuted by David M. Toepfer, a Youngstown-based assistant U.S. Attorney, who said 40 of the 100 victims of the reported scheme live in Northeast Ohio.

If convicted of all charges, Allen and Olson could receive probation or a prison term up to 20 years, said Mike Tobin, a spokesman for the U.S. attorney.

Judge Pearson set a tentative trial date of Sept. 19, with a pretrial hearing at noon Sept. 7.

Allen’s court-appointed lawyer, Mark B. Marein of Cleveland, said he’ll likely need four to six months to prepare for trial because the case is complex and has some 100 banker’s boxes of relevant documents.


Comments

1Stan(9923 comments)posted 3 years, 3 months ago

These poor fellows should retain http://www.martingweinbergpc.com/ and achieve an outcome in this case to their liking . This firm is solidly endorsed by the Cafaros .

http://www.martingweinbergpc.com/

Martin G. Weinberg
20 Park Plaza Suite 1000
Boston MA 02116
Phone: (617) 227-3700
Email: owlmcb@att.net

--------------------------------------------------------------------------------

Martin G. Weinberg is one of the nation’s most prominent criminal trial and appeals attorneys. Following his graduation from Harvard Law School in 1971, he has been chief trial and appellate counsel in hundreds of cases during his 36 years as a defense attorney. He has defended his clients on charges ranging from money laundering, tax evasion, securities fraud, mail, wire and bank fraud to racketeering, drug smuggling, internet sex offenses, computer theft, and murder. Weinberg’s experience includes, when necessary, his organizing and directing case-specific teams of nationally selected attorneys, skilled forensic and traditional investigators, and specialized experts.

Service and Recognition:

•Selected by his peers for 20 consecutive years for inclusion in Best Lawyers in America a guide widely used by other lawyers to select counsel


Suggest removal:

2camillejohnson1(1 comment)posted 3 years, 3 months ago

It is laughable that insurance companies are citing "fraud" for claims paid for sinkholes as one of the reasons rates must increase. Is it not the responsibility of the company to verify a claim is authentic and necessary before paying out on said claim http://bit.ly/rjyL2V

Suggest removal:

3peoplesrepublic(16 comments)posted 3 years, 1 month ago

Besides these two, whom I’m hoping will soon be receiving their just rewards, what about their family members,friends and employee's who also profited from their scheme? The family members who were given homes, cars and household items. How much of their ill-gotten gain was spent on their children’s education?
What about the people who worked for these two? They had to know what was going on and profited handsomely. Will they also be indicted? I think they should. If you drive the getaway car in a holdup aren’t you just as guilty as the person who went into the store with the gun? The employee's did the very same thing except they used a telephone as their choice of weapon. Why shouldn't they do some jail time, have their homes taken away and be forced to pay back at least their portion of the lies they perpetrated? Why should they get off scott-free when in reality they are just as guilty as their employer? At the very least aren't they in violation of this states Ethic's Laws? Should they be allowed to continue holding real-estate or securities licenses? Do any and or all of these people realize the extent of the damage they have caused to the lives and well being of their clients? As part of their prison sentence they should daily for two hours be taken to the town square of Boardman and strung up by their ankles. Then their ex-clients should be allowed to do to them as they wish. I'm all for beating them with a broomstick to within an inch of their lives. We'll let Bubba and his buddies take care of them the rest of the time while they're sitting in prison.

Suggest removal:


News
Opinion
Entertainment
Sports
Marketplace
Classifieds
Records
Discussions
Community
Help
Forms
Neighbors

HomeTerms of UsePrivacy StatementAdvertiseStaff DirectoryHelp
© 2014 Vindy.com. All rights reserved. A service of The Vindicator.
107 Vindicator Square. Youngstown, OH 44503

Phone Main: 330.747.1471 • Interactive Advertising: 330.740.2955 • Classified Advertising: 330.746.6565
Sponsored Links: Vindy Wheels | Vindy Jobs | Vindy Homes | Pittsburgh International Airport