SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16966 / April 17, 2001
UNITED STATES v. MICHAEL D. RICHMOND (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.