Two men have been sentenced to multi-year federal prison terms after being convicted of federal wire fraud charges in connection with a high-yield prime bank scam that stole more than $5 million from victims across the nation who were promised huge returns on investments, purportedly with little or no risk.
Francis Wilde, 66, who was the chief executive officer of Riptide Worldwide Inc. and the owner of Matrix Holdings, LLC, was sentenced to 51 months in prison and was ordered to pay nearly $6.2 million in restitution. Wilde, who was the leader of the scheme, admitted in court that he was actively involved in more than two dozen deals with investors. Mark Gelazela, also known as Mark Zella, 44, who operated IDLYC Holdings Trust, was sentenced to 41 months in prison.
Both defendants were sentenced by United States District Judge David O. Carter, who scheduled a Dec. 11 restitution hearing for Gelazela.
Wilde and Gelazela convinced victims to invest in their scheme by falsely promising high returns. They told investors that their money would be used to lease and monetize “bank guarantees” overseas. After leasing the bank guarantees, credit lines would be drawn and the funds would be used for trading, leading to extraordinary profits.
Once money came in from investors, Wilde and Gelazela split the money to pay themselves and co-conspirators. In at least one case, Gelazela took half of an investor’s funds as an undisclosed fee and told Wilde to “play” with $50,000 of the investor’s money. In other cases, money from new victims was used to pay off earlier investors to keep the scheme running.
When victims began inquiring about the status of payouts and their money, Gelazela placated them and took steps to conceal the fraud.
“Over months – and time and again – [Gelazela] lied to victims about the status of payouts under the program,” prosecutors wrote in a sentencing memorandum. “Even though defendant knew full well that he had taken part of their money without telling them, that there was no money left in the attorney escrow account, and that there was nothing to recommend the program, [the] defendant repeatedly told investors that payouts were right around the corner. That is to say, [the] defendant repeatedly lifted and crushed his victims’ spirits.”
Wilde pleaded guilty last year to one count of wire fraud. A federal jury found Gelazela guilty of two counts of wire fraud after a six-day trial late last year.
The evidence presented at trial showed that Gelazela brought 18 victims into the scheme with false promises of huge returns on their investments. Wilde admitted being involved with approximately 20 victims.
A third defendant in the case – attorney Bruce Haglund, 66, acted as an escrow “paymaster” in deals made by the co-defendants. Haglund is scheduled to be sentenced on Feb. 12.