Tuesday, September 30, 2003

Fiorini quits plea deal


Investment scandal: New trial date set

By James McNair
The Cincinnati Enquirer

[img]
George Fiorini, right, walks into the Federal Court House with federal public defender Kelly Johnson in downtown Cincinnati Monday.
(Craig Ruttle photo)
| ZOOM |
DOWNTOWN - George Fiorini snookered investors, dodged Ohio securities regulators and, Monday, reneged on a plea deal with federal authorities that would have put him in prison for up to eight years.

Fiorini, whose 10 Percent Income Plus Plan snared elderly investors from throughout the Tristate in the late 1990s, said he was "under distress" when he signed a plea agreement Sept. 19. The deal called for him to plead guilty to two of 79 criminal charges - one for mail fraud, one for income tax evasion - and receive a maximum eight-year prison sentence, up to $500,000 in fines and a requirement to pay an unspecified sum to his victims.

"I'm the victim," Fiorini insisted as he entered an elevator outside U.S. Senior Judge Herman Weber's eighth-floor courtroom in the Potter Stewart Federal Courthouse on Monday. "I'm innocent."

Fiorini's plea switcheroo was not expected. Fiorini's lawyer, federal public defender W. Kelly Johnson, and the U.S. Attorney's office signed the deal, and Weber set aside time Monday to hear the plea. When the lawyers said the deal was off, Weber put the case back on course for trial, this time on Nov. 18.

Assistant U.S. Attorney John DiPuccio said he did not know why Fiorini changed his mind. Although Fiorini faced a maximum of eight years in prison, DiPuccio said he would likely have served 30 to 48 months. He risks a lifetime sentence if convicted at trial.

"He just said, 'No,' " the prosecutor said. "As Kelly said, he just found out today."

Johnson was flustered by the turn of events. After the hearing, he allowed Fiorini to hold court with reporters, a maneuver uncharacteristic of defense lawyers. Fiorini did just that, from the courtroom all the way down to the sidewalk outside the federal courthouse, where a TV station taped an impromptu exchange between Fiorini and Harold Rengering, a retired firefighter from Harrison who is awaiting the return of $32,000 from Fiorini.

Fiorini, co-founder of the Cornerstone Open Bible Church in Green Township, sprinkled religion and prayer into his sales pitches. Monday, he told Rengering that "God will provide" investors a return of their lost life savings.

Fiorini consented to a state civil charge that put him out of business in 2001. In that case, the Ohio Division of Securities accused him of making material misrepresentations in the sale of about $13.5 million in promissory notes.

Fiorini said much of that money was raised for a company called Guardian Investments and pocketed by an associate named Terry Quatkemeyer, an ex-Cincinnatian who moved to Los Angeles and became an exotic car dealer with the alias Terry Quinn. Quatkemeyer is now in a federal prison on bank fraud charges.

Fiorini said the "chain reaction" of events involving Guardian and Quatkemeyer put his clients' money out of reach. Some of the 10 Percent plan proceeds, though, went into a Fiorini company called IGW Trust - or In God We Trust. Fiorini said he invested that money in exotic cars, several Cincinnati properties and condos in Gatlinburg, Tenn., and Siesta Key, Fla., but can't access it because the government seized the assets as spoils of fraud.

Rengering complained that Fiorini has broken promises to make partial repayments. After their televised tiff, Rengering refused Fiorini's handshake and walked off.

"He's not repaying anything," Rengering grumbled.

Fiorini is free, under travel restrictions and allowed to sell coral calcium nutritional supplements for a Worthington, Ohio, company called Global Outreach Partners. DiPuccio, noting in court that Fiorini earned only $75 during one recent period, wondered how Fiorini was able to give one investor a 2003 Buick Century, an act reported by the Enquirer on Friday.

"I don't know where Mr. Fiorini is getting money for restitution," DiPuccio told Weber. "If he's getting money of this amount, I don't know if he should have a public defender."

Weber referred the matter to the court's Pretrial Services unit for a report due Oct. 10.

Key events in George Fiorini case

May 2000: Ohio Division of Securities orders George Fiorini and Stephen Ventre to cease and desist from the fraudulent sale of high-interest promissory notes through IGW Trust and The Standard Trust. The state estimates $4.8 million in unregistered notes have been sold to 58 people.

July 2000: Fiorini agrees to the cease-and-desist order without disputing the state's allegations.

April 2001: Ohio Division of Securities asks a Hamilton County judge to issue a permanent injunction against Fiorini and Standard's successor company, Guardian Investments. It also asks the court to order an accounting of their cash flow.

September 2001: Hamilton County Common Pleas Judge Robert Ruehlman orders the accounting and forbids Fiorini and Guardian from committing further fraudulent acts.

April 2002: A group of 16 investors file a private lawsuit against Fiorini, Guardian, Ventre and associate Terry Quatkemeyer, alleging fraud, unjust enrichment and "unconscionable consumer sales practices." Another lawsuit follows, seeking class-action status for all investors. The U.S. Attorney's office files civil asset claims against eight of Fiorini's exotic cars and a boat, alleging they were bought with proceeds of fraud. The government later files similar claims against Fiorini's home in Miami Township, four other Hamilton County properties, a condominium in Gatlinburg, Tenn., and three condos in Siesta Key, Fla.Ruehlman finds Fiorini in contempt of court for failing to provide an independent audit of his finances, but suspends the 30-day jail sentence and gives Fiorini more time.

September 2002: Citibank files foreclosure lawsuit against Fiorini's home in Green Township.

December 2002: Pleading poverty, Fiorini is appointed a public defender as a federal grand jury hears evidence that he committed fraud. Ruehlman jails Fiorini for failing to provide all documents necessary for an audit. He is released Jan. 4 after serving 30 days.

March 2003: The U.S. Marshal's Service says it netted $96,000 from the sale of Fiorini's cars and boat. The money goes into a pool for a later, prorated disbursement to investors.

May 2003: Fiorini is indicted by a federal grand jury on 79 counts of fraud, money laundering and income tax evasion. If convicted, he faces a maximum penalty of 731 years in prison and a $19.8 million fine. Fiorini pleads not guilty and is released without having to post bond. Ventre, meanwhile, pleads guilty to one count of mail fraud and agrees to testify against Fiorini.

Sept. 29: Fiorini retracts a plea deal that would have sent him to prison for up to eight years on one mail fraud and one income tax evasion conviction. Trial is set for Nov. 18.

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E-mail jmcnair@enquirer.com.




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