NEW HAVEN, Conn. (AP) — For more than a decade, Michael Goldberg tricked hundreds of investors into giving him more than $100 million on a promise of fat profits on diamonds and distressed properties.
He turned himself in to authorities in 2009 and pleaded guilty last year to wire fraud charges in connection with the Ponzi scheme. But after his arrest, prosecutors say Goldberg tried to lure investors on a promise of big profits on gold, only this time a prostitute named Rain who was solicited to invest alerted authorities.
Goldberg, a 40-year-old former Wethersfield resident, faces more than 12 to 15 years in prison as well as restitution when he is sentenced Monday in U.S. District Court in Hartford. Federal prosecutors contend he should be sentenced within that range, saying many victims lost their homes, retirement security and children's college savings.
"It is impossible to overstate the economic carnage wrought by the defendant's decade-long fraud," prosecutors wrote in court papers, saying victims were left with mountains of debt and forced to work multiple jobs.
Goldberg's attorney, Richard Brown, asked for a lower sentence, saying Goldberg turned himself in before authorities were investigating him out of remorse and cooperated extensively with investigators.
The victims, who include an attorney, lost more than $30 million, prosecutors said. Goldberg also exposed his friends to possible criminal charges by recruiting them to get investors, prosecutors said.
No one else has been charged, but the case remains under investigation.
Under the scheme, Goldberg told investors he would buy diamonds at very low prices in New York City and then resell them at a profit of up to 25 percent. He also claimed to be buying foreclosed and seized business assets from a bank and selling them to companies.
The scheme lured more than 350 investors over 12 years. Goldberg did not buy the diamonds or properties and paid the promised returns to existing investors with money he received from new investors, prosecutors say.
When investors raised questions, Goldberg had friends pretend to be bank or other company employees. A group of investors from Florida gave him nearly $9 million after he took a representative of the group to the bank in New York in 2009. There, they met a person pretending to be a bank employee on the second floor who gave him a business card and letter on bank stationery claiming a relationship with Goldberg to sell the distressed properties.
Prosecutors said Goldberg's crime stemmed from "narcissism, ego and greed" and rejected his claims he was a Robin Hood-type figure. They said Goldberg, who was college educated and had a high-paying job in the medical device field, used the money to pay personal expenses and to finance a music promotion company.
"Rather, the defendant acted out of pure ego, wanting others to see and treat him as a savior, when in reality he was robbing them blind," prosecutors wrote.
Authorities say they learned in July that Goldberg was trying to get investors to finance his purchase and resale of gold, promising a 100 percent return each month. The prostitute, who had a relationship with Goldberg for more than two years, alerted the FBI after she searched his name on the computer and saw his arrest, prosecutors said.
Goldberg claimed the gold investments were legitimate, but prosecutors said it appeared he made misrepresentations to the prostitute to try to get her to invest. He was not charged in connection with the gold investments.