Muzio gets prison for fraud involving Delray investment club
By Palm Beach Business.com
WEST PALM BEACH — Michael Muzio, the Tampa businessman who tried to keep a Delray Beach scam alive through a second scam, will be spending the next 13 years or so in prison.
In February, a federal jury found Muzio guilty on eight counts of wire and mail fraud, conspiracy to commit fraud and lying to the Securities and Exchange Commission and the FBI. Each fraud count carried a maximum of 20 years in prison.
On Thursday, Muzio was sentenced to 163 months behind bars, according to the U.S. attorney's office.
Muzio owned a Palm Beach Gardens-based company called International Business Ventures Group. that had no business operations and no assets other than the fact that it was publicly traded.
Muzio became involved with the operators of HomePals, Ponzi scheme that operated out of Delray Beach. HomePals purported to be an investment club that all but guaranteed that it would make its members, mainly Haitian Americans, rich through a supposedly proprietary trading strategy.
By the time HomePals’ operators crossed paths with Muzio, the scam was desperate for cash, having burned through $14.3 million that it had taken from its members. Muzio sold the scamsters on a pump-and-dump involving International Business stock that could solve their problem: they could pay off club members with stock. Worthless stock.
Of course, they’d have to convince club member that International Business was a worthy investment, and since International Business had no operations of any sort, a bit of creativity was in order. So Muzio wrote series of press releases touting deals that the company.
One stated that the company was negotiating a deal to sell prepaid electric meters to the Haitian government. Another said the company was selling 9,000 prepaid Mastercards to HomePals members. He made a series of “wash” trades — basically shuffling shares of stock back and forth solely to create the illusion of trading volume and investor interest in the stock. He also hired a friend to write glowing “analyst” reports about International Business’ dealings.
But Muzio complained that he wasn’t getting any financial support from HomePals for his scam. "It costs money to maintain a stock and I am the only idiot doing it," he said in an email that investigators obtained.
Eventually SEC investigators began having suspicions about the stock, and on March 6, 2009, the agency suspended trading in the stock.
