Business

US Ponzi schemes snare wives

Jon Burstein
March 6, 2010

They once could be found at the sides of their charming, wealthy husbands - leading lives of privilege and glamour.

Now those years of comfortably basking in money are gone, replaced by lawyers' questions and the scorn of former friends. Their posh lives had been built on their husbands' schemes.

Call them ''The Real Housewives of South Florida Ponzi Schemers''. Among them is mother Victoria Meisner, whose husband, Michael, masterminded a $US37 million fraud.

Her story, however, is different from that of most of the other wives'. For like her husband, she's now a convicted felon.

Meisner, 53, could be headed to federal prison. She was to be sentenced overnight for filing a false tax return. She pleaded guilty in November to reporting $US49,626 of total income in 2003, despite helping rack up more than $US430,000 in personal expenses that year on a debit card belonging to her husband's business, Phoenix Diversified Investment Corp.

Her case highlights one of the inevitable questions for authorities investigating Ponzi schemers and how they threw around their ill-gotten gains: Should family members whose luxurious lifestyles were funded by dirty money face criminal charges themselves?

In some cases, yes, authorities say. John Gillies, the head of South Florida's FBI office, has called the Meisner case ''a cautionary tale to spouses that they cannot claim ignorance about their financial situation when they know better''.

Defence lawyers who specialise in white-collar crime agree that just because a spouse or family member isn't actively involved in a fraud, it doesn't mean he or she is safe from criminal prosecution.

''Willful blindness in the criminal system is tantamount to actual knowledge if there are sufficient red flags to alert an individual that criminal activity is afoot,'' said Sharon Kegerreis, a Miami lawyer and former federal prosecutor.

Among those warning signals: a sudden, unexplained influx of wealth into the household or curious patterns of moving money between bank accounts. With the economy receding, the number of investment frauds investigated by the FBI more than doubled in the fiscal year ending last September. Some frauds made headlines in South Florida, including the disgraced Fort Lauderdale lawyer Scott Rothstein's $US1.2 billion Ponzi scheme and Sean Healy's $US20 million fraud.

In both cases, the defendants' wives - Kimberly Rothstein and Shalese Healy - said they knew nothing about their husbands' acts, and believed the money came from legitimate businesses. Neither wife has been criminally charged.

Then there is the wife of the country's most famous Ponzi schemer - Ruth Madoff. It appears she will not be charged criminally in husband Bernard's $US65 billion Ponzi scheme.

What got Meisner ensnared in her husband's criminal investigation was her signature. She admitted signing false income tax returns for 2003 and 2004, court records show.

''I knew that my family and I maintained a lavish lifestyle well in excess of the 'total income' reported,'' she acknowledged in a sworn statement last November.

Michael Meisner stole $US6.8 million in a scheme that took in more than 260 investors, court records show.

He pleaded guilty in September to mail fraud, loan application fraud and tax evasion. He is due to be sentenced on March 19 and faces up to 30 years in prison.

He has said his wife signed what he handed her, trusting him without question. ''Unfortunately, though inadvertent, I betrayed my wife's love and trust by keeping her in the dark,'' he wrote in a letter to her sentencing judge.

McClatchy Newspapers