Boca Raton man pleads guilty in FBI sting
MIAMI, Dec 01, 2012 (Menafn - Sun Sentinel - McClatchy-Tribune Information Services via COMTEX) --A Boca Raton man accused of running a network of businesses built on lies pleaded guilty Friday to a mail fraud charge arising from an undercover FBI operation.
Edward Laborio, the founder of Envit Capital Group, admitted to participating in a "pay-to-play scheme" in which he offered illegal kickbacks to someone he believed was the manager of a pension fund, according to court documents. It turned out to be a FBI sting targeting small business owners willing to engage in shady stock trading practices.
Laborio's plea in Miami federal court came as he faces charges in Boston that he defrauded investors of Envit Capital Group and business entities associated with Envit. In addition, the U.S. Securities and Exchange Commission (SEC) is suing him, accusing him of duping investors into buying more than 5.7 million of stock in his companies.
The SEC alleges Laborio, 33, used investors' funds to cut 340,000 in checks to himself, spend 100,000 at casinos and cover personal expenses such as video store rentals, restaurant meals and pharmacy bills, court records show.
Laborio's attorneys, Robert Wolf and David Weinstein, declined to comment Friday on the cases against their client.
Envit Capital Group once had billed itself as "a boutique investment banking, securities and investment management firm."
Laborio launched the first of the Envit businesses, Envit Capital LLC, out of his Boston apartment in 2006 and within months suffered significant financial losses, according to the SEC. That's when he is accused of hiring about 20 telemarketers who used high-pressure sales tactics and lies to lure people to buy Envit stocks, court records show.
Investors were guaranteed annual returns with salespeople claiming that the Envit businesses were profitable and had annual revenues in the tens of millions of dollars, court records show.
But no investors ever were able to sell Envit-related shares or received any dividends, the SEC alleges. The Envit businesses lost money.
The telemarketing operation initially was based in Boston, but had moved down to Boca Raton by early 2009, court records show.
Around that same time, Laborio met with an undercover FBI agent posing as a friend of a corrupt pension fund manager. Laborio agreed to sell artificially inflated shares of Envit Capital Group to the pension fund if the pension fund manager could get kickbacks, court records show.
Laborio faces up to 20 years in prison on the fraud charge arising from the kickback scheme. He is scheduled to be sentenced on March 8 by U.S. District Judge Kathleen Williams.
He is still awaiting arraignment in Massachusetts federal court on a count of conspiracy to commit fraud and a count of mail fraud.
The SEC suspended trading of Envit securities in May 2009 and a few months later, revoked Envit Capital Group's ability to sell securities.
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