The United States Attorney for the Southern District of Florida has announced that former Florida and Michigan resident Joseph Paul Zada has been indicted in connection with a $20 million investment scheme. The indictment charges Zada with mail fraud, wire fraud, interstate transportation of stolen property, and money laundering.
According to the Detroit Free Press, Zada scammed 28 investors, including former Red Wings hockey star Sergei Fedorov, out of approximately $20 million.
The government claims that Zada attracted investors to his scheme by pretending to be a successful businessman with ties to oil ventures in Saudi Arabia. To support his image of wealth and success, Zada hosted extravagant parties, drove expensive luxury cars, and had expensive homes in Wellington, Florida and Grosse Pointe, Michigan.
The indictment alleges that investors in the scheme, including Fedorov, were told that their monies would be pooled with Zada’s own funds and invested in oil ventures. In reality, the government claims that Zada used the investments to fund his extravagant lifestyle and make Ponzi-type payments to earlier investors.
If convicted, Zada faces a maximum penalty of 20 years in prison for each count of mail and wire fraud, and a maximum of 10 years in prison for each count of interstate transportation of stolen property and money laundering.