Men sentenced for defrauding investors with pyramid scheme
OWENSBORO, Ky. (AP) — A Kentucky man and a North Carolina man were sentenced last week for defrauding investors of millions of dollars in a pyramid scheme, according to the U.S. Attorney’s Office for the Western District of Kentucky.
Richard Maike, of Owensboro, Kentucky, was sentenced to 10 years in federal prison for running the pyramid scheme in 2013 and 2014 through a company called Infinity 2 Global or I2G. Co-defendant Doyce Barnes, of Goldsboro, North Carolina, was sentenced to four years for his role in the scheme.
Maike and Barnes sold “packages” that promised people a share of profits in an online casino, a software program called I2G Touch and a music application called Songstagram, the Owensboro Messenger Inquirer reported.
Evidence at trial showed that in approximately 15 months, I2G sold packages costing between $100 and $5,000 that generated more than $30 million in revenue. Much of that revenue went to the promoters at the top of the pyramid structure in the form of commissions, which were based on recruitment of new members into the company. Over 90% of the people who bought a membership in I2G lost money.
In the indictment, prosecutors said the online casino never made money; I2G Touch was flawed and available elsewhere for free; and company officials fraudulently marketed Songstagram by claiming major music artists were involved in the product.
Maike is believed to have spent as much as $12 million of the funds taken in, according to court records. He was also found guilty of money laundering for transferring investor funds from Owensboro to an account in Hong Kong, then sending the money back to the U.S. to buy ranch land in Kansas.
Maike was ordered to pay a $100,000 fine. A restitution hearing for the two is scheduled for Feb. 2 at the U.S. District Court in Owensboro.
Maike, Barnes, and a third man, Faraday Hosseinipour, were convicted by a a federal jury in September. Hosseinipour is scheduled to be sentenced Jan. 5.