An Arizona concert promoter was sentenced to nine years in federal prison for running a Ponzi scheme that took in $50 million from investors who thought they were financing shows for stars such as the Rolling Stones, Faith Hill, Tim McGraw, Barbra Streisand and Mariah Carey. Miko Dion Wady, originally charged in a thirty-seven count indictment,, previously pled guilty in February to ten counts of money laundering and wire fraud. Under the terms of his plea agreement with prosecutors, Wady faced a sentence of as much as eleven years in federal prison.
Wady, through his company Dezert Heat Entertainment ("Dezert Heat"), operated the scheme from 2004 to 2007. Wady told potential investors that Dezert Heat promoted shows and tours for top performers such as Jimmy Buffett and George Strait, among other performers, and solicited funds to secure financing for the shows. In return, Dezert Heat promised to use ticket sales to pay monthly returns of 4% for up to six months or 24% for one single promoted event. In total, more than 250 investors entered into over $50 million of loan and event funding agreements with Wady and Dezert Heat. However, neither Wady nor Dezert Heat ever promoted any of the purported shows, and instead promoted approximately ten local or lesser known artists. Instead, Wady paid out nearly half of investor funds in the form of fictitious interest payments, and misappropriated at least $3 million to sustain an exorbitant lifestyle that included the purchase of a Lamborghini, Ferrari, Bentley, and a 41-foot luxury motor boat. Authorities estimate the total loss to Wady's investors at over $30 million.
The scheme was exposed when one of Wady's associates, James Cundiff, became suspicious of Wady's excuses for delays in payments and hired a former FBI agent to investigate the operation. However, when Cundiff began to suspect that his fears were well-founded, he transferred over $300,000 from the operation's accounts to his own personal accounts. Cundiff later pled guilty to a single charge of money laundering and was sentenced to two years in prison. Cundiff was also ordered to pay $300,000 in restitution to victims of the scheme.
In addition to his prison sentence, Wady was also ordered to pay $30 million in restitution to his victims and to perform 250 hours of community service.