Steven Zoernack, Investment Fraud Conspiracy, Florida 2024

Tampa, Florida –

Steven Zoernack, 55, a Sarasota resident, has pleaded guilty to conspiring to commit wire fraud.

Zoernack faces a maximum penalty of five years in federal prison, a $250,000 fine, and mandatory restitution to his victims in the amount of $2,890,518.54.

The scheme, which began in August 2012, saw Zoernack and his co-conspirators market multiple hedge funds to accredited investors across the United States and Canada. They raised more than $6 million through their solicitations.

In marketing the funds, Zoernack failed to disclose numerous material facts about his background and the funds he was managing. Specifically, he failed to disclose that he had been convicted on federal wire fraud charges in 2007; had previously filed for bankruptcy; had a history of tax liens and adverse money judgments; and still owed hundreds of thousands of dollars in restitution to past fraud victims.

Zoernack actively sought to conceal his past by misappropriating fund assets to pay an online reputation manager to manipulate Internet search engine results about him to prevent potential investors from learning of his past. He also routinely lied about his educational background, his expertise as an investment manager, and his experience in the financial industry.

After obtaining investor contributions, Zoernack began misappropriating fund assets for his personal use. He made monthly withdrawals of unauthorized ‘salaries’ and ‘bonuses’ in amounts ranging from $12,000 to $25,000 and used these and other fund assets to pay for personal and non-business related expenses, none of which were disclosed to investors.

This case was investigated by the Federal Bureau of Investigation, alongside a parallel civil enforcement action brought by the Securities and Exchange Commission. It is being prosecuted by Assistant United States Attorney Eric K. Gerard.

The investigation revealed that Zoernack’s firm, EquityStar Capital Management LLC (‘EquityStar’), managed multiple hedge funds, including the Petroleum Black Energy Fund, the Global Partners Fund, and the Momentum Growth Fund. Zoernack’s employees were also found to be involved in the scheme, with some impersonating former employees and corresponding with investors online using fictitious names and phony email accounts.

The total amount of losses suffered by investors in this case is staggering. Zoernack’s actions have left a trail of destruction, and it is only thanks to the tireless efforts of investigators and prosecutors that he will face justice.

The guilty plea by Zoernack marks a significant victory in the fight against white-collar crime. It serves as a reminder that those who engage in such activities will be held accountable for their actions.

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