![]() ![]() Despite having received this advice in or around June and July 2016, Schwartz, Individual #1, and their co-conspirators continued to operate the business and hid the advice contained in the legal memoranda from investors, failing to disclose the risks it described. As 1 Global continued to lose money over time, the cash shortfall continued to increase and 1 Global was only able to continue operations by raising new investor funds before its eventual collapse in July 2018.Īccording to the court record, Schwartz was also aware that 1 Global had received written legal advice authored by an outside law firm retained by 1 Global, and that in memoranda received from this outside law firm, the firm opined that 1 Global was improperly offering unregistered securities, in violation of federal law. The statements gave the false impression that the finances had been independently verified by an outside audit firm. ![]() These misrepresentations were made in monthly statements mailed to investors that falsely showed profitable investments. 1 Global also paid substantial commissions and other expenses with investor funds without disclosing the extent of these payments.Īccording to the court record, co-conspirators at 1 Global made false statements to investors that gave the impression that 1 Global had an independent auditor. Furthermore, the conspirators misappropriated large amounts of cash for themselves, including, primarily, to support the lavish lifestyle of Individual #1. In reality, 1 Global business lost money and ultimately used new investor funds to pay back earlier investors who sought to cash out in a manner consistent with a Ponzi scheme. 1 Global promised investors that all or nearly all of that money would be applied to various MCA agreements with the investor supposedly receiving a portion of the proceeds paid back by the merchants. Heide, and others made false and misleading representations to investors and potential investors as to the profitability of 1 Global’s business in marketing materials and periodic account statements. In order to attract investments, Individual #1, Schwartz, Attorney #1, co-conspirator Alan G. On or about June 5, 2014, 100% of the issued and outstanding shares of 1 Global were transferred under the umbrella of Individual #1’s purported family trust, and designated as the trust property. Schwartz also served as the designated trustee for a purported family trust and an art trust for which Individual #1, the de facto owner of 1 Global, served as the grantor. Schwartz was a director and consultant at 1 Global, and also held out as a Chief Operating Officer in the company’s marketing materials. In many cases, the commissions were not fully disclosed to investors. 1 Global raised money using investment advisors and other intermediaries, with promises to these advisors of significant commissions. The investors would supposedly receive a proportionate share of the principal and interest payments as the loans were repaid. To fund these loans, 1 Global obtained funds from investors nationwide, offering short-term investment contracts that promised to “place” the investors’ money in MCAs. He faces a maximum statutory sentence of up to five years in prison and a fine up to $250,000 or double the gross proceeds of the offense.Īccording to the court record, 1 Global Capital LLC (1 Global) was a commercial lending business based in Hallandale Beach, Florida, that made the equivalent of “pay day” loans to small businesses at high interest rates, termed merchant cash advance loans (“MCAs”). Schwartz is scheduled to be sentenced on Maat 3:00 p.m. Hunt to the single count information, charging him with one count of conspiracy to commit wire fraud and securities fraud, in violation of Title 18, United States Code, Section 371 (Case No. Steven Allen Schwartz, 75, of Delray Beach, Florida, pled guilty before U.S. De Palma, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), Miami Field Office made the announcement. Piro, Special Agent in Charge, FBI Miami Field Office, and Michael J. DELRAY BEACH, FL () (Source: United States Department of Justice) - Today (January 10, 2020), a former consultant who also served as the Chief Operating Officer of 1 Global Capital, LLC pled guilty for his role in connection with a $287 million securities fraud scheme involving a commercial payday loan business that operated from early 2014 through July 2018 and impacted more than 3,400 investors in 42 different states.Īriana Fajardo Orshan, United States Attorney, Southern District of Florida, George L. ![]()
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