Boca Raton trader Michael A. Meisner and his company, Phoenix Diversified Investment Corp., of commodity pool fraud in a federal civil suit filed on Tuesday.

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Boca trader Meisner slapped with fraud suit
South Florida Business Journal - by Paul Brinkmann


First comes love, then the Chapter 11 bankruptcy filing
The U.S. Commodity Futures Trading Commission has accused Boca Raton trader Michael A. Meisner and his company, Phoenix Diversified Investment Corp., of commodity pool fraud in a federal civil suit filed on Tuesday.

Meisner’s company was pushed into bankruptcy by three investors last May. He filed a personal Chapter 11 bankruptcy soon after, but not until he had thrown a wedding for his daughter at Donald Trump's Mar-a-Lago Club.

Lawsuits against Phoenix allege he defrauded more than 100 investors out of up to $30 million.

His daughter, Brooke, was wed amid concerns that Phoenix investment funds may have been used to pay for the events, according to at least one civil suit. In an April letter, which was attached to two civil complaints, Meisner said he would stop using investor money on his personal lifestyle.

Those concerns have not been answered in court filings or in response to phone calls and e-mails the South Florida Business Journal made to Meisner's attorneys. An outgoing message on the company's office phone says its offices are closed and promises to make all investors whole.

Through Phoenix, Meisner is alleged to have taken unsecured loans from individuals and promised up to 3 percent returns per month, according to multiple court complaints.

In his personal bankruptcy filing, Meisner states he has up to $10 million in assets and up to $10 million in liabilities. Meisner has filed for personal bankruptcy twice before, according to court records.

The filing lists two mortgages in the top unsecured creditors list: Select Portfolio Servicing of Salt Lake City at $384,015 and Citi Residential Lending of California at $293,865. The list also shows four credit card accounts with debt totaling $192,527.

The bankruptcy mailing list for creditors also includes Trump Group's Boca Ocean Development in Aventura, which isn't affiliated with Donald Trump; Anthony and Elaine Petrillo of Fort Lauderdale; and Jack Oved of Opa-locka.

The Petrillos filed a federal lawsuit against Phoenix and Meisner on Sept. 19, alleging they suffered a $116,000 loss. Oved filed suit in federal court April 29, alleging a $3 million loss. Similar suits are pending in Broward and Palm Beach County courts.

The Future Trading Commission’s complaint states Meisner and Phoenix fraudulently solicited at least 26 investors for at least $8 million.

The suit alleges Meisner misappropriated those funds, and the accounts associated with the commodity pool allegedly suffered net losses of approximately $5.8 million between May 2003 and March 2008.

According to the commission’s complaint, Meisner solicited pool participants by claiming that Phoenix owned a valuable software program that spotted trading patterns in the futures markets and guaranteed high profits.

He made several material misrepresentations and failed to disclose material facts to induce prospective and current pool participants to invest or remain invested in the pool, the complaint states. These included false representations about the past profitability of the pool and the actual value of the pool, the complaint says.

The commission alleges that, according to Phoenix account statements provided to pool participants dated March 31, those participants had a cumulative balance of more than $4 million in the pool. However, between March 31 and present, Phoenix refused to honor pool participants’ requests to withdraw funds and several Phoenix checks were returned for insufficient funds.

The complaint also charges Phoenix with not registering with the commission as a commodity pool operator, as required by federal commodities law.

Victoria R. Meisner, Meisner’s wife, also of Boca Raton, is named in the complaint as a relief defendant for receiving at least $1 million of funds to which she was not entitled.

The commission seeks a statutory restraining order, preliminary and permanent injunctive relief, the return of funds to defrauded participants, the repayment of ill-gotten gains, and civil monetary penalties.