Lawsuit alleges millions lost by local family in ‘massive Ponzi scheme’
By Joe Tash
A retired Rancho Santa Fe couple and their relatives are suing a Florida man, alleging in court documents that he defrauded them of millions of dollars in a “massive Ponzi scheme.”
The lawsuit was filed in Broward County, Fla., last fall by Peter and Marlene Imbesi of Rancho Santa Fe; their son, Michael Imbesi, of La Jolla; their daughter, Giovanna Imbesi, of Venice, Ca.; and Giovanna’s boyfriend, David Thall.
Accused of running the alleged Ponzi scheme are George Elia, 68, and his wife, Darlene Elia, 51, through Elia’s company, International Consultants and Investment Group, Ltd. Corp. Also named in the lawsuit is Elia’s attorney, Frederick Braun.
A Ponzi scheme, according to the court documents, is a fraud in which funds invested by later investors are used to pay artificially high returns to original investors, thus attracting more people to invest their money.
Michael Imbesi said in an interview that he met Elia in 2005 through a mutual friend, and decided to invest with him after Elia promised returns of 4 to 7 percent per quarter. Over the next several years, Imbesi said, he gave additional funds to Elia to invest, reaching a peak of about $3.3 million invested with Elia’s company.
In 2010, Peter and Marlene Imbesi, invested their life savings of $250,000 with Elia, while Michael Imbesi’s sister, Giovanna, a cancer patient, invested about $200,000, and her boyfriend invested $25,000.
Michael Imbesi said he would travel to Florida regularly to have business lunches and dinners with Elia and his wife. Elia told him he managed investments for about 12 clients.
“He was a close friend, articulate, well-dressed, and spoke very intelligently about stock market details and world financial issues,” said Imbesi.
Elia sent statements and interest payments promptly, raising no suspicions, Imbesi said.
“There was never a question. He was always exemplary in his timing, he was exemplary in his ability to take phone calls, you could reach him right away. He provided tremendous comfort as to the fact that all was fine,” Imbesi said.
The first sign of trouble, however, came in the spring of 2011, when Elia began to be late with his quarterly statements and interest payments. At one point, Peter and Marlene Imbesi grew concerned about the safety of their life savings, and asked for their money back. While Elia promised to send them the money, according to Michael Imbesi and court documents filed in the lawsuit, the couple has yet to see any of their investment money returned, and none of the other family members’ money has been returned, either.
Last summer, Michael Imbesi said, his stepmother was so stressed out by the prospect of losing her retirement nest egg that she was rushed to the hospital by ambulance with extremely high blood pressure.
After the lawsuit was filed, the Imbesi family convinced a judge to freeze Elia’s corporate accounts, and the family is also seeking to have both George and Darlene Elia’s personal accounts frozen, said Imbesi’s attorney, Jeffrey Cox.
Legal documents filed in the case allege that Elia provided the Imbesi family with forged brokerage account statements to convince them their funds were safe; that Elia used funds deposited into corporate brokerage accounts for personal expenses; and that brokerage account records indicate Elia did not invest the family’s funds as promised.
In particular, a document filed in court in January alleges that between 2008 and 2010, Elia transferred more than $2.3 million from his corporate account to two other Florida corporations he controlled with his wife, Darlene, and that he withdrew some $242,000 in cash from his corporate account in 2010 and 2011.
Records also show, according to legal documents, that Elia used corporate funds to make payments on cars including a Ferrari and a Mercedes Benz, and for such expenses as mortgage payments, health insurance premiums, lawn and pool services and utilities.
In a deposition taken in November, Elia refused to answer questions about his business activities or the Imbesi family’s allegations, citing his Fifth Amendment right against self-incrimination. His wife, Darlene, has missed a series of scheduled deposition dates, including the most recent date on Thursday, Feb. 23.
Elia and his attorneys, Andrew Rier of Miami and James Doherty of Massachusetts, could not be reached for comment for this story.
Michael Imbesi said George Elia also spoke to both he and his father about George Elia’s brother, a heart surgeon named Christopher Elia who George Elia said lives in Rancho Santa Fe.
“The inference of that was success runs in the family,” Michael Imbesi said.
California medical records list Christopher Elia as retired from his medical practice, and he could not be reached for comment.
Michael Imbesi said he was told that George and Darlene Elia moved out of their Florida home in January, and he does not know the couple’s present whereabouts.
He said he is “terrified,” both for the fate of his own life savings, and those of his parents and sister.
While no criminal charges have been filed against Elia, Michael Imbesi said he met last week with investigators from the FBI and the federal Securities and Exchange Commission.
“I’d like to be optimistic” that the family’s money will be returned, he said, but, “does all the evidence indicate otherwise? Yes.”