A 66-year-old Orlando, Fla., man was sentenced to 12 years in federal prison last month for operating a Sweden-based credit union that swindled more than $17 million from 400 investors in the U.S. and other nations.
U.S. District Court Judge Mark E. Walker in Gainesville, Fla., also ordered Samuel J. Cusumano Jr. on Feb. 22 to pay $7.8 million in restitution and serve three years of probation after his prison term.
Cusumano pleaded guilty on June 24 to wire fraud.
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Cusumano admitted that between 2007 and 2009, as board chair and founder of Storehouse Credit Union, he promoted the international credit union as a high yield investment opportunity through misleading presentations and materials.
Using the credit union's website, he fraudulently induced investors from across the U.S., including Florida, Canada, Great Britain and Australia, to transfer funds to investment accounts under Cusumano's control by misrepresenting the rates of return generated by the financial institution, federal prosecutors said.
He claimed that Storehouse used professional currency traders when, in fact, he personally executed all trades from his Orlando home, investing primarily in the Foreign Currency Exchange Market.
Although the financial institution was losing money, Cusumano produced fraudulent financial statements to convince investors that the credit union was reaching or exceeding the high rates of return that were promised to them.
He promised investors their accounts would earn monthly returns of more than 5%.
But when investors discovered they were unable to withdraw their funds due to trading losses, a financial audit was conducted.
The audit revealed that investor funds had been depleted, earnings had been overstated and Cusumano had used a large portion of investors' funds to pay for his personal expenses, according to court documents.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
