Wednesday, March 30, 2016
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX: (716) 551-3051
BUFFALO, N.Y.-U.S. Attorney William J. Hochul Jr. announced today that Daniel Rice, 53, of Stoughton, Massachusetts, pleaded guilty to wire fraud before U.S. Senior District Judge William M. Skretny.
Assistant U.S. Attorneys Scott S. Allen Jr. and Mary Catherine Baumgarten, who are handling the case, stated that Rice, a retired City of Boston Police Detective, aided and abetted Michael Wilson, 29, formerly of Hamburg, NY, to defraud investors by promising large returns on phantom investments through companies known as New Frontier.
Rice pleaded guilty for his involvement in a deal brokered in January 2010, in which the defendant induced a Montana broker to wire $100,000 as part of a phony investment with Zodiak Capital, one of Wilson’s fraudulent New Frontier companies. Rice kept $40,000 before passing the remaining $60,000 on to a Wilson account at HSBC Bank in Buffalo.
In July 2010, Rice was involved in a second deal with Zodiak, and failed to tell the Montana broker about Zodiak’s connection to Wilson’s companies. As a result, on July 15 and 19, 2010, a total of $71,875 of a different investor’s money was wired to accounts in the Buffalo area controlled by Zodiak. The only money recovered was the $71,875 wired to Zodiak in July 2010, because the government quickly applied to have the receiving bank accounts frozen. The funds eventually were returned to the investor, who lives in Utah.
Wilson is currently charged in a 47 count indictment with wire fraud, money laundering and conspiracy, for deals entered into by his fraudulent companies in 2008 through 2010. The indictment accuses Wilson of attempting to defraud investors out of more than $8,000,000 between June 2008 and July 2009 by creating several phantom investment companies known collectively as New Frontier, including such names as Zodiak, Carnic LLC, Phantom Holdings and others, all purportedly located at 6553 Boston State Road in Hamburg. Wilson thereafter induced individuals and companies to invest in financial instruments with complex sounding names such as leveraging agreements that promised high-yield earnings and returns in short periods of time.
Rather than investing clients’ money, Wilson spent it on a variety of personal items, including $2,500,000 as a down payment for Boston State Road properties, automobiles - including a Hummer, a Corvette, two Land Rovers, and a Mercedes ML 500, artwork, and other items. The Indictment also discloses that in January 2009, Wilson paid $1,800 to hire an actor from a talent agency to portray a person using the name of an alias (George Possiodis), which name and persona the defendant used during his scheme.
Soon before being indicted, Wilson fled to Canada and is currently evading law enforcement authorities. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.
Rice’s sentencing is scheduled for July 13, 2016 at 10 a.m. before Judge Skretny.
The plea is the result of an investigation by the Federal Bureau of Investigation, under the direction of Special Agent in Charge Adam S. Cohen, with assistance from the Boston Police Department Anti-Corruption Division.
Department of Justice
U.S. Attorney’s Office
Western District of New York
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