Florida man sentenced to 24 years for Ponzi scheme

MIAMI (Reuters) - A Florida money manager was sentenced to 24 years in prison on Friday for orchestrating a Ponzi fraud scheme that took in $44 million from investors by purporting to make profits by currency trading.

Michael Riolo, 38, of Boca Raton was sentenced to 293 months imprisonment, followed by 3 years of supervised release, by U.S. District Court Judge Kenneth A. Marra.

"During these tough economic times, it is more important than ever that those who lie to and steal from the investing public be held accountable for their misconduct," Acting U.S. Attorney for the Southern District of Florida Jeffrey Sloman said in a statement announcing the sentence against Riolo.

Prosecutors said Riolo used two companies he owned, Sterling Wentworth Currency Group, Inc and LaSalle International Clearing Corp, to purportedly trade futures contracts in the yen, euro, Swiss franc and other currencies.

They said Riolo issued "materially false statements" to persuade more than 80 investors to commit at least $44 million from 1999 to 2008. But instead of using the money to trade in foreign currency, Riolo used it for other purposes, including his own personal use and benefit, according to prosecutors.

Riolo issued monthly statements that falsely reported trading profits and increasing account balances, and he distributed more than $29.5 million to investors as a return of principal and profits, when in fact most of it came directly from new investors, the prosecutors said in their complaint.

In a separate case on Friday, U.S. authorities charged three other Floridians in an alleged $14 million Ponzi scheme that defrauded hundreds of Haitian American investors.

Florida investors have been rocked by high profile Ponzi schemes in the course of this year.

The wealthy east coast resort town of Palm Beach was hard hit by the $65 billion fraud of former New York money manager and convicted swindler Bernard Madoff, who is serving a 150- year prison term.

On the state's west coast, authorities in January arrested hedge fund manager Arthur Nadel in an alleged $360 million fraud that spanned 10 years. He is awaiting trial.

(Reporting by Pascal Fletcher and Jim Loney; editing by Andre Grenon)