SANTA ANA, California – Two California men have been sentenced to multi-year federal prison terms after being convicted of federal wire fraud charges for participating in a “high-yield prime bank” scam that stole more than $5 million from victims across the nation who were promised huge returns on investments, purportedly with little or no risk.
Francis Wilde, 66, of Mountain View, who was the chief executive officer of Riptide Worldwide Inc. and the owner of Matrix Holdings, LLC, was sentenced yesterday to 51 months in prison and was ordered to pay nearly $6.2 million in restitution. Wilde, who was the leader of the scheme, was actively involved in more than two dozen deals with investors, he admitted in court.
Mark Gelazela, who was also known as Mark Zella, 44, of Marina Del Rey, who operated IDLYC Holdings Trust, was sentenced yesterday to 41 months in prison.
Both defendants were sentenced by United States District Judge David O. Carter, who scheduled a December 11 restitution hearing for Gelazela
Wilde and Gelazela lured victims to invest in their scheme by falsely promising astronomical returns. They told investors that their money would be used to lease and monetize “bank guarantees” overseas. After leasing the bank instruments, credit lines would be drawn from the instruments and those funds would be used for trading, leading to extraordinary profits, they told victims.
Once money came in from investors, Wilde and Gelazela almost immediately split the money to pay themselves and their co-conspirators. In at least one case, Gelazela took half of an investor's funds as an undisclosed fee, and told Wilde to “play” with $50,000 of the investor's money. In other cases, money from new victims was used to pay off earlier investors to keep the scheme running. When victims began inquiring about the status of payouts under the program and then began seeking the return of their money, Gelazela lulled them with falsehoods and took steps to conceal the fraud.
As part of the scheme, Wilde and Gelazela falsely represented that Gelazela was an international finance guru – while in reality Gelazela had zero success with leasing and monetizing bank guarantees, and his research consisted of “Google.” Wilde and Gelazela also lied about how investors' money would be used, made excuses for delays in payment, and urged victims to avoid cooperating with investigators.
“Over months – and time and again – [Gelazela] lied to victims about the status of payouts under the program,” prosecutors wrote in a sentencing memorandum. “Even though defendant knew full well that he had taken part of their money without telling them, that there was no money left in the attorney escrow account, and that there was nothing to recommend the program, defendant repeatedly told investors that payouts were right around the corner. That is to say, defendant repeatedly lifted and crushed his victims' spirits.”
Wilde pleaded guilty last year to one count of wire fraud. A federal jury found Gelazela guilty of two counts of wire fraud after a six-day trial late last year.
The evidence presented at trial showed that Gelazela brought 18 victims into the scheme with false promises of huge returns on their investments. Wilde admitted being involved with approximately 20 victims.
A third defendant in the case – attorney Bruce Haglund, 66, of Irvine, who acted as an escrow “paymaster” in deals made by his co-defendants – is scheduled to be sentenced by Judge Carter on February 12. Prosecutors argued in court documents that Haglund's role provided “an air of legitimacy and safety” because victims sent their money to his attorney trust account. As a result of pleading guilty to one count of wire fraud, Haglund faces a statutory maximum sentence of 20 years in prison.
This case was investigated by the Federal Bureau of Investigation and IRS Criminal Investigation.
The case is being prosecuted by Assistant United States Attorney Daniel H. Ahn of the Santa Ana Branch Office.
Component(s): USAO – California, Central
Press Release Number: 17-189 Updated October 24, 2017
Central District of California DOJ / 17-189 / October 24, 2017