“$1 million, Cadillacs and Rolex seized; Ponzi schemer Dante DeMiro seeks public defender”

$1 million, Cadillacs and Rolex seized; Ponzi schemer Dante DeMiro seeks public defender

Posted: 07 Jan 2011 02:50 PM PST

Published: Friday, January 07, 2011, 5:45 PM Updated: Friday, January 07, 2011, 7:47 PM

MONA SHORES — If only he'd pawned his Rolex watch, alleged Ponzi schemer Dante DeMiro might not have ended up a federal prisoner sitting in a county jail.

Instead, the luxury watch has been seized by the U.S. government, along with nearly $1 million, two Cadillacs, a Harley Davidson and at least a dozen computers.

And DeMiro, a financial adviser accused of bilking Mona Shores Public Schools of $3.7 million, landed in jail Thursday because he didn't bother paying a $3,966.46 civil judgment against him.

The Rolex watch alone could have satisfied the amount of money a Southfield court ruled DeMiro owed Kelly Services, which sued DeMiro's Gemini Financial Services in 2005 for failing to pay for goods and services.

When DeMiro didn't pay and failed to show up for a debtor hearing in October 2005, a bench warrant was issued for his arrest.

And that warrant, issued by 46th District Court in Southfield, is what led to DeMiro being arrested by federal marshals Thursday following a court appearance related to five felony bank and wire charges. DeMiro, 43, was indicted last October on the fraud charges based on an FBI criminal complaint that DeMiro took money victims gave to his firm, MuniVest, for the purchase of bank certificates of deposit and instead used the money to pay off other investors and for his own personal use.

In addition to Mona Shores, other alleged victims are Lapeer County, Comstock Township, a credit union in Iowa and a bank in Virginia. Victims' total losses could come to $10 million, according to FBI documents.

Following a hearing on the Ponzi fraud case in U.S. District Court in Port Huron Thursday, the judge remanded DeMiro to the custody of the U.S. Marshal's Service for bond violation. DeMiro was taken to the St. Clair County Jail as a federal prisoner, where he remained Friday.

DeMiro could ask for a hearing to reinstate his bond to win his release, according to a spokeswoman with the U.S. Attorney office.

One of the conditions of DeMiro's release in September on a $10,000 bond in the fraud case was a requirement to clear up the bench warrant within 60 days, according to a U.S. Attorney spokeswoman.

In addition to seizing his personal property and bank accounts, the federal government has placed a lien on his property, including a Northville Township home purchased by MuniVest last June for $401,000 and a Milford Township home with an estimated value of $204,000, according to tax records.

DeMiro also is facing forced bankruptcy proceedings from Mona Shores, which wants to speed up the disbursement of DeMiro's assets. Once DeMiro is declared bankrupt, a trustee can be appointed to determine who has claim to what portion of his assets.

Mona Shores sent $3.7 million in voter-approved bond proceeds to DeMiro, who was supposed to use the money to buy certificates of deposit from multiple banks. However, the FBI alleges DeMiro used that money to pay off other investors and for his own use.

The FBI says it tracked $765,445 of the school district's money to payments DeMiro made to Lapeer County and Comstock Township near Kalamazoo. Those municipalities also had sent money to DeMiro for CDs he never purchased, and despite the payments they received from him, they are still owed nearly $2 million.

DeMiro hired high-powered Detroit-area attorney James C. Thomas, who has represented former Detroit Mayor Kwame Kilpatrick and successfully represented a defendant in the first post 9/11 terrorist trial in the U.S. But on Thursday, the judge granted Thomas' request to withdraw due to a conflict of interest. Thomas is representing a defendant in a case in which DeMiro is expected to be a witness

Before he was taken to jail Thursday, DeMiro requested a taxpayer-funded public defender.

Mona Shores officials had used DeMiro as a financial adviser since 1999, and were stunned when the FBI approached them last September about its investigation. Fallout from the alleged fraud included the forced resignations of Mona Shores Superintendent Terry Babbitt and Finance Director Mike Schluentz, both of whom will leave April 1.

E-mail: lmoore@muskegonchronicle.com

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Harley Davidson

Friday, 7 January 2011