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Vice-President Pleads Guilty in $21 Million Fraud Scheme
Florida’s Louis N. Gallo, III, 45, of Parkland, Vice-President of Commodities Online LLC (COL), has pleaded guilty to participating in a $21 million investment fraud scheme. Gallo, III, appeared before U.S. Magistrate Judge Jonathan Goodman on Friday, August 8, 2014, and pleaded guilty to one count of conspiracy to commit mail and wire fraud, in violation of Title 18, United States Code, Section 1349.
According to court documents, Gallo conspired with co-defendants James C. Howard, III, Patricia S. Saa, Michael R. Casey, and others to defraud individuals who invested in COL. From approximately January 2010 through April 2011, Howard and his co-conspirators used material false and fraudulent representations and material omissions to obtain over $21 million from over 700 investors.
Gallo and his co-conspirators used COL to sell COL ownership units, subscriptions to the COL website, and investments in purported transactions to buy and sell commodities. Via the COL website, Gallo and his co-conspirators offered investors the opportunity to participate in funding certain purported ‘pre-sold’ commodities contracts. Gallo and his co-conspirators represented to investors that COL had a track record of profits. However, COL did not have profits. Any payments made to investors were made using funds received from newer investors.
Gallo and his co-conspirators also caused material misrepresentations to be made about the leaders of COL. After mid-2010, Howard stepped down as President of COL, and Casey, an attorney, became the President of COL. Gallo and his co-conspirators represented to investors that Howard was no longer managing COL, when in fact, Howard remained in charge. Also, Gallo and his co-conspirators did not disclose to investors that both Gallo and Howard had previously been convicted of federal felonies and that Gallo was still serving a term of supervised release.
Gallo and his co-conspirators also made material misrepresentations and omissions about the misuse of funds that COL received from investors. For example, Gallo caused at least $2.5 million to be diverted for himself and his family.
After COL was taken over by a court-appointed Receiver, Gallo participated in a similar scheme involving Global Solutions and Acquisitions LLC (GSA). Approximately 50 individuals invested about $1.1 million in GSA. About $200,000 was paid to investors using funds from other investors. The GSA investors lost about $900,000. As part of his plea agreement, Gallo agreed to pay restitution to the victims of both COL and GSA.
Mr. Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, commended the investigative efforts of the FBI. This case is being prosecuted by Assistant U.S. Attorneys Ana Maria Martinez and John P. Gonsoulin.
Sentencing for Gallo is scheduled for October 16, 2014.
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Key Facts
- State: Florida
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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