{"id":6328,"date":"2013-03-07T18:47:29","date_gmt":"2013-03-07T23:47:29","guid":{"rendered":"http:\/\/kennetttimes.com\/?p=6328"},"modified":"2013-03-07T18:47:29","modified_gmt":"2013-03-07T23:47:29","slug":"for-chester-county-defendant-apparent-role-reversal","status":"publish","type":"post","link":"https:\/\/kennetttimes.com\/?p=6328","title":{"rendered":"For Chester County defendant, apparent role reversal"},"content":{"rendered":"

In 2004, he accused now-disbarred lawyer of fraud; now he\u2019s charged<\/span>\u00a0<\/em><\/h1>\n
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By Kathleen Brady Shea<\/strong><\/span>,\u00a0Managing Editor, The Times<\/em><\/span><\/p>\n

\"seal\"<\/a>A Chester County man with myriad identities and multiple addresses may have had an advantage in running the Ponzi scam alleged Thursday by federal authorities: Court records show he was once on the receiving end of a con.<\/p>\n

Istvan Merchenthaler \u2013 also known as Steven Merchenthaler, Atilla Mergenthaler, Adien A. Donis, Adien Adonis, Joey Gallow, and T.S., among other aliases \u2013 was charged in a superseding indictment with seven additional counts stemming from an alleged investment fraud scheme.<\/p>\n

Merchenthaler, 42, of Coatesville, who has resided at various times in Downingtown, Glenmoore, and West Chester, was first charged nearly a year ago, court records show. He agreed to pretrial release conditions and then violated them, disappearing in a stolen vehicle in October until he was apprehended last month in Maryland, federal officials said.<\/p>\n

He now faces charges that include a total of four counts of wire fraud, two counts of aggravated identity theft, four counts of money laundering, two counts of filing false tax returns, and two counts of interstate transportation of stolen property, said U.S. Attorney Zane David Memeger in a news release.<\/p>\n

According to the superseding indictment, from May 2006 to about February 2013, Merchenthaler claimed to be the founder of PhoneCard USA, a company purported to be a \u201cpremier distribution source\u201d for prepaid phone cards and cell phones.\u00a0 In reality, Merchenthaler operated a Ponzi scheme, stealing over $2 million from over 200 investors and using much of these funds for his own benefit and to perpetuate his scheme, the indictment said.<\/p>\n

Merchenthaler allegedly approached investors and persuaded them to make investments in PhoneCard USA.\u00a0 In his marketing materials, Merchenthaler claimed that these investments would finance the \u201cexponential growth\u201d of PhoneCard USA and would provide investors with \u201cgenerous returns,\u201d the indictment said, adding that he falsely boasted that PhoneCard USA had \u201clucrative contracts\u201d with major retail chain stores \u201ccovering territories that span the East coast.\u201d<\/p>\n

In these materials \u2013 and in his communications to investors \u2013 Merchenthaler claimed bogus alliances with retailers such as Walmart, 7-Eleven, and BJ\u2019s Wholesale Club, the indictment said.\u00a0In addition, Merchenthaler said he maintained friendships that didn\u2019t exist with executives at Walmart and 7-Eleven, the indictment said.\u00a0 It said Merchenthaler repaid portions of loans to investors \u201cto lull them into a false sense of security,\u201d and when he was unable to pay commissions, he made up excuses, such as being victimized by embezzling employees.<\/p>\n

Instead, Merchenthaler bought cars, such as a $69,000 Mercedes Benz; jewelry; and firearms with the illegal proceeds, the indictment said. Moreover, he reported \u201cno taxable income\u201d for both 2008 and 2009, when he received about $380,000 and $993,000 respectively, the indictment said.<\/p>\n

According to the superseding indictment, Merchenthaler stole a 2013 Dodge Charger and a 2012 Jeep Grand Cherokee from two dealerships while he was on the lam.<\/p>\n

Court records for the Pennsylvania Supreme Court show that Merchenthaler figured prominently in the 2009 disbarment of Daniel L. McCaughan, a West Chester \u00a0attorney who received a two- to four-year prison sentence after a jury convicted him in 2009 of misusing another client\u2019s money.<\/p>\n

The family of Merchenthaler, who was arrested in San Paolo, Brazil, on drug-trafficking charges in April 2004, hired McCaughan, who bragged that he had \u201cdealings with an influential Columbian law firm specializing in international drug-trafficking cases,\u201d records said.<\/p>\n

Merchenthaler\u2019s family paid McCaughan $150,000, which was supposed to be transmitted to the Colombian firm through an intermediary in Canada. Although McCaughan insisted he sent the money, he acknowledged that he did not obtain the proper documentation \u201cto adequately safeguard\u201d it, court records said, adding that Merchenthaler was released in February 2005 with representation from a different law firm, which had \u00a0no ties to McCaughan.<\/p>\n

If convicted, Merchenthaler faces a mandatory-minimum sentence of two years in prison, a possible maximum sentence of 170 years\u2019 imprisonment, a $3.5 million fine, three years of supervised release, and an $1,400 special assessment, the release said, adding that the Federal Bureau of Investigation and the Internal Revenue Service Criminal Investigation Division also worked on the case.<\/p>\n

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In 2004, he accused now-disbarred lawyer of fraud; now he\u2019s charged\u00a0 By Kathleen Brady Shea,\u00a0Managing Editor, The Times A Chester County man with myriad identities and multiple addresses may have had an advantage in running the Ponzi scam alleged Thursday by federal authorities: Court records show he was once on the receiving end of a […]<\/p>\n","protected":false},"author":5,"featured_media":6329,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,698],"tags":[2008,2009,2010,2011,2012,2013,2014,2015,2016],"class_list":["post-6328","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-region","tag-adien-a-donis","tag-adien-adonis","tag-atilla-mergenthaler","tag-daniel-l-mccaughan","tag-istvan-merchenthaler","tag-joey-gallow","tag-phonecard-usa","tag-steven-merchenthaler","tag-u-s-attorney-zane-david-memeger"],"_links":{"self":[{"href":"https:\/\/kennetttimes.com\/index.php?rest_route=\/wp\/v2\/posts\/6328","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/kennetttimes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kennetttimes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kennetttimes.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/kennetttimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6328"}],"version-history":[{"count":0,"href":"https:\/\/kennetttimes.com\/index.php?rest_route=\/wp\/v2\/posts\/6328\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kennetttimes.com\/index.php?rest_route=\/wp\/v2\/media\/6329"}],"wp:attachment":[{"href":"https:\/\/kennetttimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6328"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kennetttimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6328"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kennetttimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6328"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}