Arizona Man Pleads Guilty to Role in Investment Fraud Scheme | USAO-ME

PORTLAND, Maine:  An Arizona man pleaded guilty in federal court today to conspiring to commit wire fraud, U.S. Attorney Darcie N. McElwee announced.

According to court records, in 2017 and 2018, Arthur Merson, 67, of Scottsdale, Arizona, participated in a scheme to defraud involving investments in Standby Letters of Credit (SBLCs). Investors were promised that they could receive a portion of the value of an SBLC, worth millions of dollars, for a much smaller initial investment. Investors were promised returns equal to many times the amounts of their initial investments in a matter of weeks. They were also promised that their money would remain in the attorney trust account of a co-conspirator—who at the time was a licensed attorney in Florida—until confirmation was received that the SBLC had been issued.

In his role as an intermediary between investors and the principal members of the conspiracy, Merson falsely represented to investors that the investment was not risky and that he had been involved in similar successful deals in the past. In fact, he had not been involved in prior successful transactions of this sort, nor had he made any significant amount of money from them.

After co-conspirators fraudulently transferred investor funds, Merson relayed a variety of excuses from other members of the conspiracy for why the transactions had not occurred. He also falsely represented that he was an independent consultant who was only going to receive a small finder’s fee, and claimed not to know the details of the transaction or the payouts the clients could expect. In fact, he had a significant independent financial interest in the investment transaction that he failed to disclose, and affirmatively misled investors about, as he responded to investor inquiries.

Merson faces up to 20 years in prison and a fine of up to $250,000. He also faces up to three years of supervised release. He will be sentenced after the completion of a presentence investigation report by the U.S. Probation Office.

The FBI investigated the case.

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