SANTA ANA, CALIF.
A federal judge sentenced two California men to federal prison after they were convicted of wire fraud for being involved in a “high yield prime bank” that stole more than $5 million from victims, officials announced today.
The victims were promised big returns on investments with little or no risks, officials stated.
Francis Wilde, 66, of Mountain View, who was the chief executive officer of Riptide Worldwide Inc. and the owner of Matrix Holdings, LLC, was sentenced Monday to 51 months in prison and was ordered to pay nearly $6.2 million in restitution, officials said.
Wilde, who was the leader of the scheme, was involved in more than two dozen deals with investors, he admitted in court, officials said.
Mark Gelazela, who was also known as Mark Zella, 44, of Marina Del Rey, who operated IDLYC Holdings Trust, was sentenced to 41 months in prison.
Both defendants were sentenced by United States District Judge David O. Carter, who scheduled a Dec. 11 restitution hearing for Gelazela
Wilde and Gelazela lured victims to invest in their scheme by falsely promising astronomical returns. They told investors that their money would be used to lease and monetize “bank guarantees” overseas.
After leasing the bank instruments, credit lines would be drawn from the instruments and those funds would be used for trading, leading to extraordinary profits, they told victims.
Once money came in from investors, Wilde and Gelazela almost immediately split the money to pay themselves and their co-conspirators.
In at least one case, Gelazela took half of an investor’s funds as an undisclosed fee, and told Wilde to “play” with $50,000 of the investor’s money.
In other cases, money from new victims was used to pay off earlier investors to keep the scheme running.
When victims began inquiring about the status of payouts under the program and then began seeking the return of their money, Gelazela lulled them with falsehoods and took steps to conceal the fraud.
The evidence indicated that Wilde and Gelazela falsely represented that Gelazela was an international finance guru – while in reality Gelazela had zero success with leasing and monetizing bank guarantees, and his research consisted of “Google.”
Wilde and Gelazela also lied about how investors’ money would be used, made excuses for delays in payment, and urged victims to avoid cooperating with investigators, according to officials.
“Over months – and time and again – [Gelazela] lied to victims about the status of payouts under the program,” prosecutors wrote in a sentencing memorandum. “Even though defendant knew full well that he had taken part of their money without telling them, that there was no money left in the attorney escrow account, and that there was nothing to recommend the program, defendant repeatedly told investors that payouts were right around the corner. That is to say, defendant repeatedly lifted and crushed his victims’ spirits.”
Wilde pleaded guilty last year to one count of wire fraud. A federal jury found Gelazela guilty of two counts of wire fraud after a six-day trial late last year.
The evidence presented at trial showed that Gelazela brought 18 victims into the scheme with false promises of huge returns on their investments.
Wilde admitted being involved with approximately 20 victims.
A third defendant in the case – attorney Bruce Haglund, 66, of Irvine, who acted as an escrow “paymaster” in deals made by his co-defendants – is scheduled to be sentenced on Feb. 12.
Prosecutors argued in court documents that Haglund’s role provided “an air of legitimacy and safety” because victims sent their money to his attorney trust account.
Haglund is facing up to 20 years in prison when he is sentenced.