Two Miami-Dade County men were charged with criminal and civil fraud for allegedly touting a phony TV network and production company to investors and falsely saying basketball legend Michael Jordan would be an investor in the business.
Vision Broadcast Network raised at least $5.7 million from 100 investors nationwide, the SEC said last week.
Chief Executive Erick Laszlo Mathe and consultant Ashif Jiwa falsely told investors that Vision Broadcast owned low-power television stations and 70 broadcast licenses to operate additional stations, the SEC said.
The defendants allegedly told investors the assets would be worth $400 million once the television stations became operational.
The U.S. Attorney’s Office in Philadelphia announced criminal charges against Mathe and Jiwa.
The pair solicited investors from 2007 to 2010 and “brazenly misrepresented” that Jordan planned to invest in the penny stock firm, the SEC said.
They also falsely told investors that they had a commitment from an institutional investor to invest $25 million in the company, the SEC said.
The two promoters allegedly “contradicted representations they made to investors about the use of their funds.”
According to the SEC,
Mathe and Jiwa together received $459,000 in undisclosed commissions from the funds they raised for Vision Broadcast.
They also received more than $1.3 million for purported professional or consulting services that they never provided the company.
Vision Broadcast reimbursed one of Jiwa’s close relatives $425,000 in personal expenses and $84,000 in travel expenses incurred by Jiwa.
Vision Broadcast paid personal expenses for Mathe and Jiwa that included more than $3,000 on golf equipment, lease payments on their luxury cars totaling $47,529, and nearly $2,500 in costs related to Mathe’s boat.
Vision Broadcast is now a dissolved company.
According to the SEC’s complaint, Mathe lives in North Miami Beach and Jiwa in Miami Beach.
Richard L. Cassin is the publisher and editor of the FCPA Blog. He can be contacted here.