SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16512 / April 11, 2000
UNITED STATES v. MICHAEL D. RICHMOND (United States District Court for the District of Massachusetts, C.A. No. 00-CR-10125-JLT)
On April 7, 2000, a federal grand jury in Boston, Massachusetts indicted Michael D. Richmond, of Orland Park, Illinois, on seventeen counts of mail fraud and twenty-one counts of money laundering in connection with Richmond's fraudulent sale of over $8 million in purported certificates of deposit through an entity called Royal Meridian International Bank (RMIB). 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 indictment, Richmond promoted the sale of the RMIB certificates of deposit through a network of sales agents associated with Liberty Estate Planning and Liberty Institute, which Richmond ran. Richmond allegedly prepared and distributed false promotional materials, including an RMIB.com web-site, promising a guaranteed 12% annual rate of return with no risk to principal. According to the indictment, the promotional materials falsely stated that RMIB had offices in several countries, that investor funds never left RMIB and that RMIB held $1.25 in reserves for each dollar invested with RMIB. According to the indictment, over 170 individuals located in more that a dozen states invested with RMIB and approximately 40% of the investors were over 70 years of age.
The indictment alleges that Richmond diverted funds for his personal benefit, including the purchase of a $700,000 waterfront home in Clearwater, Florida, the purchase of a $400,000 Illinois property for his business partner, and deposits of $570,000 to a Richmond controlled account in the Bahamas. Richmond, according to the indictment, also transferred nearly $6 million to a Florida entity know as Zone Productions, which promised Richmond an annual return of over 360%.
According to the U.S. Attorney for the District of Massachusetts, Richmond faces up to 20 years imprisonment, fines and an Order of Restitution if he is convicted. The U.S. Attorney is continuing to investigate this matter.
The Securities and Exchange Commission previously sought and obtained temporary restraining orders, preliminary injunctions and asset freezes against Richmond, RMIB, Zone Productions and others involved in these alleged schemes. The Commission's litigation is continuing. For further information see Litigation Release Nos. 15813, 15892, 16027 and 16104.