He lost millions of investment dollars, now he’s pleading guilty to conspiracy to commit wire fraud

A Sarasota man pleaded guilty to conspiring to commit wire fraud Friday and could owe his victims nearly $3 million in restitution.

If convicted, Steven Zoernack, 55, faces a maximum penalty of five years in federal prison, a $250,000 fine, and mandatory restitution to his victims in the amount of $2,890,518.54, according to the Acting United States Attorney W. Stephen Muldrow’s office.

Zoernack owned and operated EquityStar Capital Management LLC, an investment advisory firm with offices in Sarasota and Newport Beach, Calif. where he formed and managed multiple hedge funds, according to the plea agreement.

Beginning in August 2012, Zoernack and his co-consipirators, who were not named, marketed funds to accredited investors across the United States and Canada, raising more than $6 million, according to Muldrow’s office.

But while marketing the funds, Zoernack allegedly did not disclose that he had been convicted on federal wire fraud charges in 2007; had previously filed for bankruptcy; had a history of tax liens and adverse money judgments; and still owed hundreds of thousands of dollars in restitution to past fraud victims, according to Muldrow’s office.

Zoernack allegedly lost millions of dollars of investor’s money and lied about his own and his employee’s educational backgrounds, his expertise as an investment manager and in the financial industry, according to Muldrow’s office.

He is also accused of impersonating former employees while corresponding with investors and lying to potential investors about his portfolio’s ratings, profits, market returns, and losses, according to Muldrow’s office.

The office noted that Zoernack allegedly paid someone — using misappropriated funds — to manipulate Internet search engine results about him so potential investors would not learn about his past.

Zoernack also allegedly withdrew unauthorized “salaries” and bonuses ranging from $12,000 to $25,000 that were used, along with other fund assets, to pay for personal and non-business expenses that were not disclosed to investors, according to Muldrow’s office.

This story was originally published March 31, 2017 at 7:01 PM with the headline "He lost millions of investment dollars, now he’s pleading guilty to conspiracy to commit wire fraud."