Investment club founders charged

A Tampa court froze the club's assets after the commodities industry's regulator said funds were misappropriated.

By HELEN HUNTLEY, Times Staff Writer

© St. Petersburg Times
published January 24, 2003

The "Investment Freedom Club" promised eye-popping yields as high as 100 percent with little or no risk through currency trading. Like most outlandish promises, it was a fraud, the Commodities Futures Trading Commission said Thursday.

The U.S. District Court in Tampa froze the assets of club manager William Folino of Tarpon Springs, his wife, Tina Folino, and marketing agent George Belanger of Largo. The action came in response to a civil complaint by the commodities industry regulator accusing the two men of fraud and William Folino of misappropriation of funds. Tina Folino was not accused of any wrongdoing, but the commission said she was named as a defendant because she benefitted from the diversion of investor funds.

Here is how the commission says the scheme worked:

Using a flashy Web site, e-mail, Internet chatrooms and a private mailbox at a Mailboxes Etc. store in Clearwater, the two men raised $1.5-million over the past two years from 150 investors, many from other countries.

A small part of the money was invested in foreign currency trading, though not in the sophisticated markets the men claimed to be tapping. Some investors received statements showing steady growth in their accounts, and a few received payments supposedly representing their profits.

In fact, though, most of the money was diverted to pay the Folinos' personal expenses, the commission said. Among the items: $52,000 for a horse and related expenses, clothing bills from shops such as Countryside Tailor and Victoria's Secret and bills from numerous restaurants, ranging from Arigato Japanese Restaurant to Mugs and Jugs. The commission said the Folinos also used investor money to pay credit card bills and wrote numerous checks to themselves.

William Folino and Belanger had a falling out last fall, and Belanger posted notices about the dispute on the club Web site. Belanger claimed he never had access to investor funds and did not receive the earnings he was promised for his work for the club. He called Folino a "professional con man."

Neither the Folinos nor Belanger could not be reached for comment Thursday.

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