Authorities arrested two South Florida men and charged them with operating a $7 million Ponzi scheme that purported to buy and sell parts for military transport aircraft. Victor Brown, 54, and Roger Green, 78, were arrested by Florida Department of Law Enforcement officials and charged each with one count of racketeering and one count of conspiracy to commit racketeering. Racketeering carries a maximum prison sentence of thirty years.
Brown and Green operated Military Air Parts International ("MAPI") out of an office in Fort Lauderdale, Florida - the same city where Scott Rothstein's now-defunct law firm bilked investors out of over $1 billion in Florida's largest Ponzi scheme to date. From 2004 to 2007, the company represented to investors that it bought and refurbished parts for C-130 and L-100 military aircraft, which were then resold to air forces in the United States, Great Britain, and South America. MAPI promised returns equating to 18% annually within a three to six month time period. Investors were provided statements confirming their account performance, and then solicited to roll over their investments into new deals.
In total, MAPI raised over $7 million from approximately 24 investors. However, an investigation found no evidence that MAPI acquired or possessed any aircraft parts. Instead, Brown and Green used investor funds to pay operating expenses and withdraw nearly $2 million for personal use that included gambling and luxury cars. Additionally, investor funds were used to pay returns of principal and interest to existing investors.
Brown's attorney asserted his client's innocence, and questioned whether the case could go forward, intimating that the activity occurred beyond the applicable statute of limitations. Racketeering, codified at Section 895.02 of the Florida Statutes, requires that at least one of the predicate acts forming the pattern of racketeering activity must have commenced or began within 5 years after the cause of action accrues or the conduct terminates. Additionally, at least two of the predicate acts must have occurred within 5 years of each other. In this case, authorities allege that the criminal activity took place from 2004 to 2007.