An indictment was unsealed today
charging Istvan Merchenthaler, a/k/a “Steve Merchenthaler,” 42, of Downingtown,
Pennsylvania, with four counts of wire fraud, one count of aggravated identity
theft, and two counts of money laundering, announced United States Attorney
Zane David Memeger.
According to the indictment, from at
least about May 2006 to about September 2011, Merchenthaler claimed to be the
founder of PhoneCard USA, a company that was purportedly a “premier
distribution source” for prepaid phone cards and cell phones. In reality,
Merchenthaler operated a Ponzi scheme, stealing over $2 million from over 200
investors and using much of these funds for his own benefit and to perpetuate
his scheme.
Merchenthaler approached investors and
persuaded them to make investments in PhoneCard USA. In his marketing
materials, Merchenthaler claimed that these investments would finance the
“exponential growth” of PhoneCard USA and would provide investors with
“generous returns” on their investments.
In addition, Merchenthaler falsely
claimed that PhoneCard USA had “lucrative contracts” with major retail chain
stores “covering territories that span the East Coast.” In these materials, and
in his communications to investors, Merchenthaler falsely claimed PhoneCard USA
had contracts with these major retail chain stores, including Walmart,
7-Eleven, and BJ’s Wholesale Club. In reality, Merchenthaler had no such
contracts with these major retail chain stores.
If convicted of all charges,
Merchenthaler faces a maximum possible sentence of 102 years’ imprisonment, a
three-year period of supervised release, a $1.75 million fine, and a $700
special assessment. Merchenthaler also faces a mandatory minimum of two years’
imprisonment.
The case is being investigated by the
Federal Bureau of Investigation and the Internal Revenue Service Criminal
Investigation Division. It is being prosecuted by Assistant United States
Attorney Vineet Gauri.
An indictment is an accusation. A
defendant is presumed innocent unless and until proven guilty.
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