Mike Wing "Update" Ex-Space Center CEO arrested

[Binky]

indictment claims Wing stole $4 million from investors in Texas fraud
Thursday, April 13, 2006
By LEE ROOP
Times Staff Writer [email protected]

Mike Wing, ousted as the CEO of the U.S. Space & Rocket Center in 1999, faces federal charges of stealing more than $4 million in a long-running Texas investment fraud, according to a federal indictment unsealed this week.

Wing, 46, was arrested Monday in Tyler, Texas, where he had a law office, according to Davilyn Brackin, spokeswoman for the U.S. Attorney's Office.

Wing pleaded not guilty Monday in federal court in Tyler and remains in jail, according to Assistant U.S. Attorney Wes Rivers. He faces up to 20 years in prison on each of the 18 charges.

Wing allegedly claimed to be an expert in corporate mergers and acquisitions and offered investors chances to make a "bridge loan" to an unnamed multinational Fortune 500 company, according to the indictment.

The company, which Wing told investors he could not name because of rules against insider trading, was supposedly in the process of merging with or acquiring another company, the indictment said. The company desperately needed money, Wing allegedly said, but could not seek normal financing without revealing the deal to potential competitors.

Because of the secrecy and desperation, Wing could promise investors a "transaction fee" of 50 to 100 percent of the amount they "loaned" the company, plus repayment of their loan and interest, the indictment said.

Investors sank amounts ranging from $200,000 to $1.45 million in the schemes, the indictment said.

Brackin said Wing used the money "to pay his bills" and repay earlier investors, some of whom had sued him.

In some cases, the indictment said, Wing would have new investors wire money to the attorneys of earlier investors who had won judgments or settlements against Wing. That resulted in attorneys actually helping further Wing's "Ponzi scheme," the indictment said.

Ponzi schemes are similar to pyramid schemes in which early investors are repaid with money from later investors.

The federal government is seeking nearly $3.6 million back from Wing on behalf of investors.



Troubled tenure

Wing ran the Space Center here from 1998 until he was forced out in 1999 as the center was running its debt from $10 million to about $26 million.

Part of that debt - $7.5 million - was associated with a fifth-grade Space Camp program Wing began shortly after he arrived.

Wing's idea was to bring 11,000 fifth-graders from across the country to Space Camp, and he told the center's board that major corporations would pay for the program. On Wing's promise, the center paid for hundreds of fifth-graders to come to camp and hired the staff to accommodate them.

Wing's supposed corporate pledges "were bogus," a state audit later concluded.

The State of Alabama sued Wing in 2002, and he agreed to repay $200,000. He defaulted on that agreement last year.

Brad Garrett, chief of the civil division of the Alabama Attorney General's Office, said Wednesday that the state has attorneys in Texas working to collect that money.

In Texas, federal prosecutor Rivers said Wing "worked a network of friends, friends of friends, family and friends of family" to raise the millions involved in a series of bridge loan deals.

According to the indictment, Wing told the investors that he was personally worth millions and, sometimes, hundreds of millions of dollars. But Wing said he couldn't get involved in the bridge loan personally because he was the attorney for the acquiring company. He told them that the loans were "virtually risk free," the indictment said.

The indictment said Wing created fake entities with names such as the Pinnacle Group, Woodbridge Group, Johnson Group, Webster Group and Renaissance Investments LLC to hold the bridge loan until needed. Instead, the indictment said, he diverted the money to his own use.

Victims' stories

The indictment detailed the cases of five victims from Texas, Georgia, Arizona, California and Colorado. Rivers said there were "substantially" more victims but would not give a total.

Wing's wife, Pamela, was mentioned in the indictment as a signatory to one of Wing's numerous bank accounts, but she was not indicted. Some of those bank accounts included Michael J. Wing, PC, Attorney at Law; MPW Holdings, LLC; Auburn Creek Thoroughbred Horse Farm, LLC and Wing Ranch, LLC.

Wing's attorney, F.R. "Buck" Files Jr. of Tyler, said late Wednesday that federal court rules in his district prevent him from discussing the case.

"We try our cases in the courtroom and not on the courthouse steps," he said.

Rivers was asked to put the bridge loan deal in perspective in light of his 10 years' experience as a federal fraud prosecutor.

"I would not call it unprecedented," Rivers said, adding that he has seen cases this size several times.

"There are people out there who target wealthy individuals."

[Repeat]

I think he owes Space Camp a little more than $200,000... But that's just me.

[WesL]

I couldn't agree more. The state of Alabama should have issued a warrant for his arrest years ago. If not on anything but writing worthless personal checks to the space center aka the State of Alabama.