A former investor from Brentwood faces at least 20 years in prison on charges he embezzled more than $9 million from clients and falsified statements in a Ponzi scheme.
U.S. Attorney Ed Yarbrough announced the charges Thursday against Michael J. Park, who was the owner of Park Capital Management Group. According to Yarbrough, the company has been operating a scheme since 2001, promising clients it would invest their money in brokered stocks with a high rate of return, but instead Park used the money for himself.
Park is accused of falsifying documents for investors when they sought information on their money, assuring them it was safe though their accounts existed only on paper. If clients demanded their money, Park would use the money of new clients to pay them back.
"He took money from one person and gave it to another, knowing that if everyone wants their money back, the scheme would fail," Yarbrough said.
Park has been charged with three counts of mail fraud and one count of wire fraud. He could face up to 20 years for each charge if convicted, although it would be up to a judge whether the sentences would run consecutively or concurrently.
An administrative assistant referred in the complaint as "Individual A" also benefited from the scheme, Yarbrough said. He declined to identify that person or say whether more charges were expected.
Park was a registered agent of the West Palm Beach, Fla., firm 1st Discount Brokerage, so his company did not have to submit security-related filings to the U.S. Securities and Exchange Commission.
Came to light in JulyPark appeared in U.S. District Court and was released on his own recognizance. The SEC has placed a permanent injunction against Park, barring him from being associated with any brokers, said M. Graham Loomis, assistant regional administrator with the SEC.
Park's investment dealings have been in the spotlight since July, when he attempted suicide after shutting down his office and filing for bankruptcy. He invoked his Fifth Amendment right against self-incrimination at a bankruptcy hearing in August. After the bankruptcy, he hired criminal defense attorney Hal Hardin with a $100,000 retainer fee, as well as bankruptcy attorney John McLemore.
Some investors worried their money was paying for the high-powered attorneys.
With the economy is disarray, many more of these schemes probably will come to light, Yarbrough said.
"We certainly haven't seen the end of it," Yarbrough said.
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