Miami, Florida – Isaac Grossman, 46, of Parkland, Florida, pled guilty today to wire fraud, mail fraud, and money laundering charges, for directing an elder fraud scheme in which he sold stock in his South Florida-based technology company to elderly investors across the country, and then misappropriated the investors’ funds for his own personal use.
During a hearing this morning in federal district court in Ft. Lauderdale, Grossman admitted that from September 2014 through April 2018, he raised approximately $2.4 million in investor funds for his company, Dragon-Click Corp., by soliciting investments from elderly retirees nationwide. Grossman told potential investors that Dragon-Click was developing an internet application that would revolutionize internet shopping by allowing a user to upload a photograph of any item the user wanted to purchase, identify all retailers offering that item for sale, provide price comparisons for that item across retailers, and provide a link to retailers’ websites where the user could purchase the item. Grossman admitted that he solicited funds by falsely telling potential investors they would double, triple, or quadruple their investments, and that Dragon-Click was on the verge of being sold to a large technology company, such as Google, Apple, or Amazon, for over $1 billion. He concealed from investors that, prior to raising funds for Dragon-Click, he had been permanently barred by the Financial Industry Regulatory Authority (“FINRA”) from acting as a broker-dealer or associating with any broker-dealer firm, and that he had been permanently banned from commodities trading by the U.S. Commodity Futures Trading Commission (“CFTC”).
Grossman admitted that he falsely told investors that their investment money would be used to complete the technological development of the Dragon-Click internet application, to pay legal fees related to the patent application process, and to close the sale of the application to a large technology company. But rather than using investors’ money for any legitimate business purpose Grossman admitted that he misappropriated investors’ funds for his own personal use. Specifically, Grossman admitted that he spent $1.3 million of investors’ money on gambling, diamond jewelry, luxury cars, home mortgage payments, tuition payments for his children’s private school education, and other personal expenditures. For example, Grossman’s unlawful expenditures included a McLaren MP4-12C, a Chevrolet Corvette, and a 4.81 carat diamond ring.
Grossman is scheduled to be sentenced on September 23, at 12:00 p.m., by U.S. District Judge Raag Singhal, who sits in Ft. Lauderdale. Grossman faces up to 50 years in prison.
Juan Antonio Gonzalez, Acting United States Attorney for the Southern District of Florida, and George L. Piro, Special Agent in Charge, FBI Miami, made the announcement.
Acting United States Gonzalez commended the investigative efforts of the FBI’s Miami Field Office and also thanked the SEC’s Miami Regional Office for their assistance, as they had filed a parallel civil enforcement action against Grossman. See SEC v. Isaac Grossman, et al., Case No. 18-61234-CV-BB (S.D. Fla.). This case is being prosecuted by Assistant U.S. Attorney Michael B. Homer.
Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. The mission of the Department’s Elder Justice Initiative is to support and coordinate the Department’s enforcement and programmatic efforts to combat elder abuse, neglect and financial fraud and scams that target our nation’s seniors. To learn more visit https://www.justice.gov/elderjustice. The public is encouraged to report victimization and suspected fraud schemes by calling the National Elder Fraud Hotline at 1-833-FRAUD 11 (1-833- 372-8311).
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fla.
You may find related court documents and information on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov, under case number 19-cr-60300.