Michael A. Meisner, former president and director of Phoenix Diversified Investment Corporation, Inc., faces charges of fraud following a consent order issued by the U.S. District Court for the Southern District of Florida on December 3, 2008. The Commodity Futures Trading Commission (CFTC) brought the case against Meisner and his company, alleging a Ponzi scheme that defrauded investors.
The court order, entered by Judge Kenneth L. Ryskamp, prohibits Meisner and Phoenix from engaging in fraudulent activities, making false statements, or deceiving investors in connection with commodity trading. It also freezes assets belonging to Meisner, his company, and his wife, Victoria R. Meisner, preventing them from being transferred or concealed.
According to the CFTC’s complaint, filed September 23, 2008, Meisner and Phoenix fraudulently solicited investors into a commodity pool, misappropriated funds, and provided false account statements that inflated the value of investor holdings. Between May 2003 and March 2008, the pool’s trading accounts reportedly suffered net losses of approximately $5.8 million. Despite these losses, Meisner allegedly concealed the financial difficulties by using funds from new investors to pay earlier investors – a hallmark of a Ponzi scheme.
The scheme unraveled around April 21, 2008, when Phoenix abruptly ceased operations. The following day, Meisner admitted in a letter to pool participants that the trading accounts were depleted and that he had misused investor funds for personal expenses. The CFTC also alleges that Phoenix operated as a commodity pool operator without proper registration. Victoria Meisner is named as a relief defendant, accused of receiving at least $1 million in participant funds to which she was not entitled.
The CFTC is seeking permanent injunctions, disgorgement of ill-gotten gains, and civil monetary penalties. The State of Florida, Office of Financial Regulation, Bureau of Financial Investigations, assisted in the investigation.
Source: CFTC.gov
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