SARASOTA -- A Sarasota man pleaded guilty Wednesday to conspiracy to commit crimes associated with a fraudulent investment scheme and money laundering, according to federal prosecutors.
John S. Morgan, 52, faces a maximum penalty of five years in federal prison on the conspiracy charge and 10 years on the money laundering charge, according to a news release.
According to the plea agreement, from about March 2005 through August 2009, Morgan, his wife and others perpetrated an investment fraud scheme through a Danish entity called Morgan European.
In all, John Morgan and others caused investors to transfer more than $27 million to Morgan European Holdings accounts and about $10.7 million of this total was then used by Morgan and others for their personal benefit, the release said.
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The business was supposed to work with investments commonly called “prime bank instrument trading programs,” and, according to authorities, Morgan knew that such programs did not exist and never engaged in such trading, and never met with a trader engaged in such trading.
Morgan and others falsely told investors that their company’s trading programs would yield returns of 30-70 percent per month or 200 percent per 90-120-day period, and that the investors’ funds would never be put at risk, the release said.
In addition, Morgan and others promised investors that their funds would be held in escrow in a Danske Bank account that would be maintained by Danish attorney Eli Hecksher.
Hecksher has been charged as a co-conspirator in the scheme, the release said.
When investors did not receive the promised investment returns, they became concerned about the trading program and were given excuses such as the delays were caused by circumstances beyond their control, according to authorities.