By Kevin Deutsch
A Parkland man who acted as the ringleader of a $21 million investment scam—and was recorded by the FBI paying kickbacks at a Boca Raton Starbucks—pleaded guilty in federal court Wednesday to mail fraud and wire fraud.
Paul Geraci, 45, who previously lived in Parkland Golf and Country Club, worked with at least five other fraudsters to defraud investors out of the funds, according to the Department of Justice. Four of the other fraudsters have also pleaded guilty, prosecutors said.
Geraci’s guilty plea was part of a plea agreement with prosecutors. They had initially charged him with additional crimes, including conspiracy to commit money laundering and substantive money laundering. Those charges were dropped as part of the plea deal, records show.
To pull off their scam, Geraci and his cohorts falsely claimed to investors that their money would go toward developing a lucrative mobile gaming app, prosecutors said. In reality, the app never launched and generated no revenue during the scheme, according to the government.
Geraci faces a maximum of 20 years imprisonment.
Under the terms of his plea agreement, he must also pay a forfeiture money judgment amount of around $1.2 million, prosecutors said. The government is also pursuing the forfeiture of Geraci’s home, which is now recorded under his spouse’s name.
Geraci admitted in plea documents that, from the fall of 2016 until December 2018, he used an entity called Pinnacle Atlantic to fraudulently sell stock in a Florida company called SocialVoucher.com, which was later referred to as “Stocket.”
According to the government, Geraci admitted that he and others at Pinnacle Atlantic took commissions as large as 50 percent on the stock investments, a fact they never disclosed to their investors.
The plea documents state that Geraci paid one of his co-defendants, Ted Romeo, 64, of Pompano Beach, a cash payment to pitch Social Voucher stock, even though Romeo had a civil judgment filed against him. The judgment was also never disclosed to investors, prosecutors said.
Geraci also admitted that the Social Voucher stock offering was not registered with the Securities and Exchange Commission or state regulators.
According to Geraci’s plea agreement, he caused between $1.5 and $3.5 million in losses to the investors.
Federal investigators said they nabbed Geraci after secretly recording him several times during the scheme.
In one instance, Geraci was recorded pitching Social Voucher stock to an undercover FBI agent posing as an investor. He told the FBI agent his investment money was “all for programming and software and so and so,” court records show.
In reality, the FBI agent invested $50,000 in undercover funds, and half the money went into Geraci’s pocket, according to the documents.
Geraci was also recorded paying cash kickbacks at a Boca Raton Starbucks to a man he knew was under a federal fraud indictment in Detroit in exchange for the man securing investors, prosecutors said.
Geraci told the Detroit fraudster he would not disclose the kickbacks on tax returns, an exception he said he made for employees with “special backgrounds,” records show.
After the FBI executed a search warrant at the Social Voucher office in June 2018, investors sued the company, and a court granted the investors’ request to appoint a receiver to take over management of the company.
That case is pending in circuit court in Palm Beach County.
According to the government, Geraci’s co-defendants who previously pleaded guilty are:
- Michael Assenza, also known as “Michael Grimaldi,” 44, of Boca Raton, the former Director of Technology at Social Voucher. He was sentenced to 52 months imprisonment on August 11.
- Romeo, also known as “Ted Lamar,” an employee of Geraci’s boiler room, solicited Social Voucher investors. He is scheduled to be sentenced on August 26.
- Paul Vandivier, also known as “Doug Wright,” 61, of West Palm Beach, operated a boiler room that solicited Social Voucher investors. He is scheduled to be sentenced on October 7.
- Cindy Vandivier, also known as “Madison Brooke,” 64, of West Palm Beach, helped her husband operate a boiler room that solicited Social Voucher investors. She is scheduled to be sentenced on October 7.
Gerald Parker, 78, of Juno Beach, the former Chief Executive Officer of Social Voucher, is still awaiting trial in federal court in Fort Lauderdale.
Send your news to Parkland’s #1 Award-Winning News Source, Parkland Talk. Don’t miss reading Coral Springs Talk, Margate Talk, and Tamarac Talk.