Two Defendants convicted in National Internet and Securities Fraud Scheme
Two Internet Mall defendants convicted, according to South Florida DOJ Press Release, which announced:
" that, after a six month trial, a federal jury sitting in Ft. Lauderdale, Florida, returned guilty verdicts against two (2) defendants, Bernard Roemmele and Steve Hein, resulting from their participation in a complex internet fraud and securities fraud scheme. The verdicts represent the conclusion of a five year investigation of one of the largest internet fraud cases to be prosecuted in the Southern District of Florida. Both defendants were immediately remanded into custody.
Roemmele, 46, and Hein, 53, were convicted of RICO conspiracy and conspiracy to commit money laundering. Each of these charges carries a maximum term of imprisonment of twenty years and a fine of up to $250,000. Roemmele and Hein were also convicted of conspiracy to commit mail and wire fraud, which carries a maximum term of imprisonment of five years and a fine up to $250,000. Roemmele was also convicted of one count of securities violation, which carries a sentence of twenty years' imprisonment. Sentencing for both defendants is scheduled for October 27, 2006, before the Honorable James I. Cohn in Ft. Lauderdale, Florida."
The scheme was one of many in the late 90's involving internet malls. The "the defendants used the internet to offer the public a non-existent e-commerce opportunity for a fee of $295 per person. Specifically, the offering promised customers an electronic website "store" that allegedly would provide customers with an opportunity to engage in e-commerce by electronically retailing goods and services on a pornography-free "internet mall." Customers were promised falsely that they would earn commissions not only from their personal sales, but also from the sales generated by the individuals whom they convinced to purchase these websites. In addition, the defendants used the internet, false press releases, and other communications media to disseminate false and fraudulent information to induce individuals to purchase stock in CITX. Throughout the course of the fraud schemes, the defendants generated more than $15 million in criminal proceeds."
Today we call this type of scheme "affiliate marketing" and Amazon is one the biggest affiliate marketing companies around. Interestingly, the original internet malls sold nothing, but the chance to sell new internet mall to someone else. Malls inside of malls, inside of malls, etc. Sky Biz was one of the later developments, which I had the distinct pleasure of trying convince various lost souls that if they could not sell merchandise from their "mall" perhaps they could not sell a mall opportunity either. My efforts were notable largely for their failure.
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