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7 February 2005 – LAWFUEL – The Law News Network – The head of a ph…

7 February 2005 – LAWFUEL – The Law News Network – The head of a phony investment firm who ran a “prime bank” scheme that bilked victims out of approximately $2.4 million was sentenced today to 64 months imprisonment on federal wire fraud and money laundering charges.

Nicholas Roblee, 36, of Encino, was sentenced this morning by United States District Judge Lourdes G. Baird.

Roblee, who also used the name Nicholas Richmond and who was the president of Los Angeles-based Premier Marketing and Investments, Inc., pleaded guilty last May to four counts of wire fraud and four counts of money laundering.

Roblee and others involved in the scheme solicited money from more than 40 investors by promising safe investments in short-term promissory notes, real estate related “bridge” loans, and investments in precious metals trading programs that purportedly brought above-market rates of return. Roblee falsely told investors that he had extensive experience in real estate deals all over the world and that their principal would remain safely lodged in an attorney client trust fund. One investment, the “High Interest Short Term Notes Program,” purportedly brought 50 percent interest every six weeks, while defendant falsely represented that the bridge loan program would produce returns ranging from approximately 10 percent a month to as much as 200 percent per month.

Roblee’s largest victim was Rev. Calvin A. Harper, a Baptist minister from Cincinnati, Ohio. Roblee solicited Rev. Harper to invest his funds in a trading program involving gold, gold concentrate and other precious metals. Roblee promised Rev. Harper – who invested $1 million from his personal retirement savings in an effort to raise money for his church’s building program – returns of 70 percent per month over the course of a year. Roblee said that investments in precious metals were safer than other types of investments and would produce a greater yield than investments in stocks and bonds. Roblee assured Rev. Harper that his money would be placed in an attorney’s trust account where the principal would remain secure.

In reality, Roblee moved $925,000 out of Rev. Harper’s purported trust account within a few weeks of the initial investment. Roblee used the majority of those funds to pay back former investors and for other unauthorized uses, including financing an adult film production. Rev. Harper lost his entire investment.

Roblee told another victim that if she invested $250,000 her money would be placed in a special “humanitarian program” that was completely secured, overseen by the Federal Reserve, and produced returns of 200 percent per month. Roblee represented that the program was only available to people who intended to use the proceeds for humanitarian ventures. The victim planned to use the proceeds to establish a farm in South Africa for children with AIDS. Rather than use the proceeds as promised, Roblee used the money to pay Premier’s rent, phone bills, and salaries; for Roblee’s own personal expenses; and to make Ponzi payments to earlier investors.

Roblee also solicited $100,000 from an elderly lady in Atlanta who later developed an acute, degenerative Alzheimer’s-like disease, called Pick’s disease, and now lives in an assisted living facility. After repeated demands for repayment by this victim’s son-in-law, Roblee paid her back $5,000 out of the funds invested by Rev. Harper.

Rev. Harper and the other victims invested a total of approximately $4.8 million. Out of that figure, approximately $1 million went to pay Premier’s “overhead,” Roblee used $800,000 to pay his personal living expenses, and Roblee used more than $200,000 to finance adult film productions and an adult-content website.

More than $2 million was paid back to certain investors. These early investors in Premier were told that their payments represented profits, interest payments and the return of principal. In fact, Premier was nothing more than a Ponzi scheme in which money from new investors was used to pay back earlier investors.

In addition to his 64-month prison sentence, Roblee was ordered to pay in excess of $2.1 million in restitution to the more than 40 people who were victims of the scheme.

This case is the result of investigation by the Federal Bureau of Investigation, which received substantial assistance from the Securities and Exchange Commission.

British MP George Galloway and his opponent the Daily Telegraph will leave no stone unturned to sort out what could be a spectacular libel case.