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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
RMIB ALLEGES LITIGATION DISTRICT MASSACHUSETTS INVESTORS MAIL FRAUD DEPOSIT BANK INDICTMENT SCHEME SECURITIES EXCHANGE COMMISSION MICHAEL GUILTY CONNECTION SALE CERTIFICATES INTERNET MONEY ACCORDING COMPLAINT PURCHASE FICTITIOUS RMIB DEPOSIT PAYING FUNDS BANK ACCOUNTS REPAY PERSONAL EXPENSES ONGOING |
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16966 / April 17, 2001
(United States District Court for the District of Massachusetts, C.A.
No. 00-CR-10125-JLT)
Michael D. Richmond Pleads Guilty To Defrauding Investors
On April 11, 2001, Michael D. Richmond, of Orland Park, Illinois, pled
guilty to seventeen counts of mail fraud in connection with his
fraudulent sale of $8.6 million in purported certificates of deposit
through an entity he created called Royal Meridian International Bank
("RMIB"). On April 7, 2000, a federal grand jury in Boston,
Massachusetts indicted Richmond on seventeen counts of mail fraud and
twenty-one counts of money laundering in connection with his
activities. As part of the scheme, according to the indictment,
Richmond incorporated RMIB in the island of Nauru in February 1997.
The indictment alleges that RMIB was a "bank" in name only. According
to the U.S. Attorney for the District of Massachusetts, Richmond faces
up to 5 years imprisonment and a fine of $250,000 on each count, as
well as an order to pay restitution of $8.6 million to the victims of
his fraud. Sentencing is scheduled for July 11, 2001 before the
Honorable Joseph L. Tauro.
The Securities and Exchange Commission ("Commission") previously
sought and obtained temporary restraining orders, preliminary
injunctions and asset freezes against Richmond, RMIB and others
involved in the alleged scheme. The Commission´s July 1998 complaint
alleged that Richmond orchestrated a Ponzi scheme using internet
websites and a network of sales agents to convince many elderly person
and widows to liquidate annuities and other investment in order to
purchase fictitious RMIB certificates of deposit paying a guaranteed
return of up to 24%. The complaint further alleged that Richmond
deposited investors´ funds in bank accounts he controlled and
subsequently used investor´s money to repay earlier investors and for
personal expenses of Richmond and others.
Litigation is ongoing against Richmond and others in the Commission´s
action. For further information see Litigation Release Nos. 15813,
15892, 16027, 16104, 16512 and 16824A.
_________________________________________________________________
Modified 04/18/2001
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