Saturday, June 3, 2023

Men convicted for defrauding investors with pyramid scheme

Owensboro, Ky. (AP) – A Kentucky man and a North Carolina man were sentenced last week for defrauding investors out of millions of dollars in a pyramid scheme, according to the U.S. Attorney’s Office for the Western District of Kentucky.

Richard Mike, of Owensboro, Kentucky, was sentenced to 10 years in federal prison in 2013 and 2014 for running a pyramid scheme through a company called Infinity 2 Global, or I2G. Co-defendant Dyce Barnes, of Goldsboro, North Carolina, was sentenced to four years in prison for her role in the scheme.

The Owensboro Messenger Inquirer reported that Mike and Barnes sold “packages” that promised people a share of the profits in an online casino, a software program called I2G Touch, and a music application called Songstagram.

Evidence at the trial showed that over approximately 15 months, I2G sold packages priced between $100 and $5,000, generating more than $30 million in revenue. Most of that revenue went to the promoters at the top of the pyramid structure in the form of commissions, based on recruiting new members into the company. More than 90% of people who bought subscriptions to I2G lost money.

In the indictment, prosecutors stated that the online casino never made money; I2G Touch was flawed and available for free elsewhere; and company executives fraudulently marketed Songstagram, claiming that the product featured major music artists.

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Mike is believed to have spent $12 million, according to court records. He was also found guilty of money laundering for transferring investor money from Owensboro to an account in Hong Kong, then sending the money back to the US to buy ranch land in Kansas.

Mike was ordered to pay a $100,000 fine. An reinstatement hearing for both is scheduled for February 2 in US District Court in Owensboro.

Mike, Barnes and a third man, Faraday Hosseinipour, were indicted by a federal jury in September. Hussainipur is to be sentenced on January 5.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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