Michael J. Muzio Sentenced to 163 Months’ Imprisonment for Securities Fraud Targeting Haitian Community

Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation, Miami Field Office, announced that a federal judge sentenced Michael J. Muzio to 163 months’ incarceration for crimes related to his scheme to defraud Haitian-American investors in South Florida, and others, by manipulating the stock price of a publicly traded company through materially false and misleading public statements and through coordinated stock purchases and sales designed to artificially impact share prices. Although national in scope, the fraud specifically targeted Haitian-Americans in this community.

On February 17, 2010, the jury convicted Muzio for one count of conspiring to commit wire fraud, two counts of substantive wire fraud, six counts of securities fraud, and two counts of lying to the Securities and Exchange Commission and Federal Bureau of Investigation, respectively. The fraud counts carried a maximum penalty of 20 years’ imprisonment while the counts for lying to federal authorities carried a maximum penalty of five years. The court will set a hearing to address restitution within the next 90 days.

Muzio solicited investors to buy stock in International Business Ventures Group, a public shell corporation with no assets and virtually no business activities. To induce investors to purchase the stock, the defendant created a false impression that an active market for the stock existed by engaging in illegal “wash trades” in which he simultaneously entered buy orders through one brokerage account under his control and offsetting sell orders at the same price through another brokerage account under his control. These trades had no real economic effect, but the defendant’s brokers unwittingly reported the trading activity and potential investors who saw the online reports were misled into believing that the stock was actively traded at the quoted prices. Muzio also issued false and misleading press releases claiming that International Business Ventures Group had deals to provide and offer pre-paid debit cards in Haiti; pre-paid calling cards targeting customers in Haiti; and that the company had exclusive rights to market pre-paid electric meters in Haiti. Investors were offered the chance to purchase free-trading shares of stock, but then received certificates for restricted shares which could not be traded and ultimately proved to be worthless.

The case was investigated by the Federal Bureau of Investigation. This case has been prosecuted by Assistant U.S. Attorney Karen Rochlin. Mr. Ferrer also commended the efforts of SEC Regional Director Eric Bustillo and his staff for their contributions to this investigation and its successful prosecution.