Trading Company Executives Indicted On Money Laundering
May 05, 2011
MIAMI -- A grocery trading company that attracted high-level investors was accused Friday of laundering $1 billion while taking more than $300 million from investors. A 169-count money laundering and wire fraud indictment named 36 Premium Sales Corp. executives and others tied to the defunct North Miami company. Friday's announcement of the indictment gave few details on the alleged money laundering. Premium was shut down in 1993 by the Securities and Exchange Commission, which characterized the bulk grocery trader as a giant Ponzi scheme, one in which initial investors are paid off with money from new ones. About 2,000 investors were attracted to the company, which promised to take advantage of small price differences to make money by selling big shipments of groceries and health and beauty aids to regions where the goods were in demand at the moment. Bank accounts were created in Florida, Puerto Rico, California, Arizona, Nevada, and the Bahamas, and about $4 billion flowed through Premium and shell companies created by the company, the indictment charged. Convictions could carry life prison sentences and millions of dollars in fines. At the time the 4-year-old company was put out of business, the SEC said it counted $515 million in investments but could account for only $89 million in spending. Investors were lulled into a false sense of security by a spacious, plush office in a high-rent district. Word of mouth spread reports of investment returns of up to 50%.
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