Tuesday, August 17, 2004

Fiorini accepts plea bargain


Ex-insurance agent pleads guilty to 3 felony counts

By James McNair
Enquirer staff writer

DAYTON, Ohio - After attempts to fire his lawyer and stall his criminal trial collapsed, investment swindler George Fiorini pleaded guilty to three felony counts Monday. He could cut his prison term to four years if he helps the government in cases against two other fraud suspects, prosecutors said.

The guilty pleas - to mail fraud, income tax evasion and interstate transport of stolen money - ended more than four years of law-enforcement efforts against the one-time insurance agent.

No sentencing date was set. As part of his plea deal, Fiorini also agreed to repay the $5 million to 170 investors, plus $750,000 in fines.

Fiorini, 55, initially fended off state securities regulators, customers and creditors while prolonging a lifestyle that included trips to condos bought with clients' money in Siesta Key, Fla., and Gatlinburg, Tenn. But with the IRS, FBI, Postal Inspection Service and U.S. Attorney's Office working in tandem, Fiorini fought an increasingly uphill battle.

The government seized his classic-car collection, a boat and about 10 homes. A Cincinnati grand jury indicted him in May 2003, charging him with 79 counts of fraud, money laundering and income tax evasion.

His trial was moved here after Fiorini won a change of venue.

From 1995 to 2002, the government said, Fiorini offered risk-free, tax-free investments that guaranteed a 10 percent annual return.

The program, called the 10 Percent Income Plus Plan, was advertised in magazines and on radio and TV, often with testimonials from Bob Braun, the late entertainer.

Many of the hundreds of people who bought into the plan were older, unsophisticated investors who did not know precisely what they were getting into. As years went by, many received monthly interest checks. But investors generally did not know that the promissory notes they received were IOUs, not registered securities, and that they were not guaranteed.

"Look at the number of victims, the age of the victims and the devastation it caused," Assistant U.S. Attorney John DiPuccio said. "It was pretty cruel."

Although Fiorini helped raise $13.5 million for a company called Guardian Investments, which launched an ill-fated medical waste venture called Sanitec, the government focused on $5 million that Fiorini put into, among other things, a shell called IGW Trust. Investigators learned later that that stood for In God We Trust.

Fiorini, who lives on Wesselman Road in Miami Township, faces a maximum of 18 years in prison. But if he lives up to his promise of cooperation with criminal investigators, his possible sentence will drop to 46 to 57 months, DiPuccio said. The prosecutor agreed to recommend 54 months.

Fiorini agreed to tell all about an alleged accomplice named Terrance Quatkemeyer, who is believed to have taken much of the $13.5 million raised by Guardian. A former Cincinnati resident who moved to Los Angeles in the 1970s, Quatkemeyer changed his last name to Quinn and ran afoul of the law on at least two occasions in California. He was released from federal prison in March after serving more than a year for bank fraud.

But the other person Fiorini agreed to testify against, Patrick Kisor, wasn't part of the 10 Percent plan or any other Fiorini operations. Kisor was the subject of a Securities and Exchange Commission fraud case in 2003. According to the SEC and lawsuits filed by former customers, Kisor sold stakes in high-risk options trading programs from his home in Sycamore Township, only to spend most of the money on a car collection and gambling junkets.

At no time during his appearance Monday before U.S. District Judge Thomas Rose did Fiorini express remorse for defrauding investors. But he and his lawyer, Hal Arenstein, described repayment of his victims as a prime motivator.

The hearing Monday began with Fiorini seeking Rose's permission to fire Arenstein. Fiorini said Arenstein caved to prosecutorial pressure to accept a plea deal, which Fiorini wanted no part of.

"Hal lost his ability to defend me," Fiorini said.

Arenstein, who was appointed in January after Fiorini dumped a federal public defender, said he spoke to Fiorini as he would any client.

"What I told him was my concern that he could die in prison," Arenstein said in court. "I felt that with the offer of the government, he would have a life and would be home by his 59th birthday."

Fiorini at one point moved his chair to the end of the defense table instead of sitting next to the lawyer. He insisted that his way was the right way for investors.

"I want to make it right for these people - and I can do it!" he exclaimed, pounding the table. "If I have the opportunity to return to business as usual, everyone will be happy and satisfied."

Rose denied the request for a new lawyer and a new trial date. Seventy prospective jurors sat in a separate courtroom, waiting for the jury selection process to begin.

Fiorini then accepted the plea deal, and the jurors went home.

The Fiorini file

Name: George Fiorini II.

Age: 55.

Home: Miami Township, Hamilton County.

High school: Oak Hills High School, class of 1968.

Former occupation: Insurance agent.

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E-mail jmcnair@enquirer.com




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