Steven Allen Schwartz, Securities Fraud, Florida 2020

A former consultant and Chief Operating Officer of 1 Global Capital LLC has pleaded guilty to his role in a $287 million securities fraud scheme that impacted over 3,400 investors in 42 states.

Steven Allen Schwartz, 75, of Delray Beach, Florida, pleaded guilty on March 13, 2020 to conspiracy to commit wire fraud and securities fraud, in violation of Title 18, United States Code, Section 371.

Schwartz faces a maximum statutory sentence of up to five years in prison and a fine of up to $250,000 or double the gross proceeds of the offense.

According to the court record, 1 Global Capital LLC, a commercial lending business based in Hallandale Beach, Florida, made the equivalent of 'pay day' loans to small businesses at high interest rates, termed merchant cash advance loans ('MCAs').

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.

The investors would supposedly receive a proportionate share of the principal and interest payments as the loans were repaid.

However, 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.

Schwartz was a director and consultant at 1 Global, and also held out as a Chief Operating Officer in the company's marketing materials.

He 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.

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 is scheduled to be sentenced on March 13, 2020 at 3:00 p.m. before U.S. District Judge Roy K. Altman.

The $287 million scheme impacted over 3,400 investors in 42 states, and the conspirators misappropriated large amounts of cash for themselves, including to support the lavish lifestyle of Individual #1.

Source: https://www.justice.gov/usao-sdfl/pr/former-consultantchief-operating-officer-1-global-capital-llc-pleads-guilty-role-wire