Local Business Owner Pleads Guilty to Defrauding Out of State Investor
Farmingdale–The founder and president of Venture Development Associates Inc. (“VDA”), a Farmingdale, N.J., company that presents itself as a provider of corporate financing, today admitting defrauding an Illinois man out of nearly $50,000, U.S. Attorney Paul J. Fishman announced.
Michael Peniston, 54, of Farmingdale, pleaded guilty today before U.S. District Judge Anne E. Thompson to an Information charging him with one count of wire fraud in connection with obtaining nearly $50,000 in a false investment scheme from a victim who resided in La Grange, Ill. As part of his plea agreement, Peniston also agreed to pay back nearly $200,000 from a total of four victims.
According to documents filed in this case and statements made in Court:
In February 2008, Peniston, through VDA, presented an agreement to the victim that falsely represented that Peniston would use the victim’s capital to acquire “via lease procedure” a “bank instrument” valued at 500,000,000 Euros. The agreement falsely stated that Peniston would use this bank instrument to purchase “Medium Term Notes” that he would sell at a profit, and that he would pay half the profits to the victim investor. That month, in reliance on these false promises, the purported investor made three wire transfers totaling almost $50,000 to a VDA bank account controlled by Peniston.
After these transfers, Peniston and VDA continued to falsely communicate with the investor that the transactions for Medium Term Notes were imminent, and, later, that they had taken place. Later in February, Peniston promised the Illinois investor a $37.4 million payment per week over a period of 40 out of 56 weeks. In April 2008, Peniston sent a letter to the victim, stating that the “transaction” had been concluded and the funds had been forwarded to the Bank
of New York.
Peniston never acquired a “bank instrument,” nor any Medium Term Notes. He spent the investor’s money on personal expenditures. In late July 2011, Peniston again communicated with the Illinois investor, promising him
restitution. To follow up that communication, Peniston faxed the victim a copy of a check for $200,000 and a shipping label, to make it appear that Peniston was providing an attorney these funds, for payment to the victim. Peniston today admitted that he made these communications knowing that they were false.
The charge to which Peniston pleaded guilty carries a maximum potential penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for Jan. 4, 2013. Peniston was released on an unsecured appearance bond. U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special
Agent in Charge Michael B. Ward in Newark, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorney John E. Clabby of the U.S. Attorney’s Office Criminal Division in Trenton.