Slidell man pleads guilty to operating national Ponzi scheme - FOX 8 WVUE New Orleans News, Weather, Sports, Social

Slidell man pleads guilty to operating national Ponzi scheme

Federal prosecutors announce details of guilty plea from Slidell man in Ponzi scheme (Source: Flickr Commons) Federal prosecutors announce details of guilty plea from Slidell man in Ponzi scheme (Source: Flickr Commons)
NEW ORLEANS, LA (WVUE) -

U.S. Attorney Kenneth A. Polite announced that John Sposato, age 64, of Slidell, pled guilty today to wire fraud for his role in promoting and operating a national Ponzi scheme. 

According to court documents, since approximately 2010, Sposato was affiliated with, owned or operated numerous different companies, including Pegasus Investment & Development Corporation, LLC; Pegasus Investments; Oil Eaters, LLC; Organic Miracle Incorporation; S&J Corporate Properties, LLC; Pegasus Demolition & Debris Removal Service, LLC; and Pegasus Truck Lines, Incorporated. Prosecutors say Sposato represented to potential investors that the companies were all investment entities that offered participants the chance to invest in various low-risk, high-reward investment vehicles, including international bank instruments, cutting edge oil remediation and recovery products, and real estate transactions.  Sposato primarily relied upon word-of-mouth and e-mail correspondence, in which he fraudulently represented that he had knowledge and expertise in financial investing, to attract new investors. According to the U.S. Attorney's office, Sposato told investors that the alleged investments were safe, secure, and never at risk. 

In fact, Sposato did not actually invest the money in any legitimate investment vehicle, instead using it to make retail purchases for himself and his friends for various goods and services, including luxury items such as a new Chevrolet Camaro for one girlfriend and breast augmentation surgery for another girlfriend. In total, between about January 2010, and April 2014, approximately 48 individuals invested approximately $811,305 with Sposato and his companies.

To perpetuate his scheme, investigators say Sposato guaranteed extraordinarily high rates of return for so called "guaranteed" investments to potential investors, such as a $25,000 investment in "oil-clean remediation work" in the Gulf of Mexico and another $25,000 investment in the purchase of "1,000,000 gallons of EP 55 Bio Fertile" fertilizer.  Sposato promised that the first investment would result in a profit of $25,000 within approximately two weeks and the second investment would result in a profit of up to $3,000,000 within one year.  Sposato provided prospective investors false or fraudulent documents to make the investments appear legitimate and to conceal the true nature of the Ponzi scheme. When investors became impatient, Sposato used new investor money to pay lulling payments to other investors, which he characterized as partial payments for investments with an overdue return, in an effort to give investors a false sense of security, to deceive investors into believing their money was invested legitimately, and to conceal the true nature of the Ponzi scheme. 

Sposato faces a maximum term of imprisonment of not more than 20 years, followed by up to three years of supervised release, and a $250,000 fine per count. U.S. District Judge Susie Morgan set sentencing for October 5.

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