A suburban Phoenix concert promoter whom federal authorities accused of running a Ponzi scheme that bilked approximately 140 investors out of $25 million has pleaded guilty to multiple charges of money laundering and wire fraud.
Miko Dion Wady, 35, of Chandler, pleaded guilty to 10 counts earlier this week in a plea bargain that requires him to pay restitution and cooperate with authorities. He could be sentenced to as many as 11 years in prison, according to estimates in the plea deal.
Prosecutors agreed to drop 27 other counts as part of the deal.
According to the indictment, Wady convinced victims that he was promoting concerts or tours of top-tier acts such as The Rolling Stones and Barbra Streisand and needed the money to pay upfront costs. In fact, he organized only a handful of concerts involving local or lesser-known artists.
The indictment handed up in December 2009 alleged a classic Ponzi scheme, with money from new investors being used to pay off old investors.
Wady's lawyer didn't immediately return a call seeking comment Thursday. Sentencing is set for May 23 in U.S. District Court in Phoenix.
The scheme operated from 2004 through 2007, with Wady and a family he recruited to help line up investors collecting more than $50 million while promising returns of 4 percent per month, authorities said. They returned about half of the money to investors.
An initial indictment named James Cundiff and two of his sons as the family who lined up investors for Wady's enterprise, but they were not indicted. Cundiff, 61, of Chandler, pleaded guilty in November to a money laundering charge related to the Ponzi scheme; he is scheduled to be sentenced Monday.
Cundiff brought the Ponzi scheme to the attention of federal authorities after becoming suspicious of Wady's excuses for payment delays and hired a former FBI agent to investigate. But after he became convinced that Wady was committing fraud, and after informing the FBI, he moved $313,000 from the accounts of the promotion company to his personal accounts, according to his plea deal.
"He made a mistake at the time when he decided to use some of those proceeds for his benefit after he suspected that Wady was doing something wrong," Cundiff's attorney, Fred Petti, told The Associated Press on Thursday. "And the overarching fact is that all he's done is try to get someone to prosecute Miko Wady and the government has finally done that."
The government is seeking a 24-month prison sentence, but Petti is arguing for substantially less time.
"I think 24 months is excessive given the fact that Jim went to the government right away and has given them information all along," Petti said. He said the government decided that Cundiff's sons weren't involved in criminal activity.
Wady used at least $3 million of the victim's cash to pay for a lavish personal lifestyle, including buying a Bentley, Ferarri and Lamborghini and dozens of other cars, real estate and a $175,000 luxury 41-foot boat, according to the indictment. Most were leased, however.
The government already has begun auctioning off Wady's possessions, which include jewelry, boats, a travel trailer and numerous guns.
Besides The Stones and Streisand, Wady claimed to have promoted concerts for U2, Faith Hill, Tim McGraw, Mariah Carey, George Strait, Billy Joel, Jamie Foxx, Jimmy Buffet, Mary J. Blige, Pearl Jam, and at least 30 other well-known artists and entertainers.
The collapse of the concert promotion scheme left a raft of small investors holding the bag.