Robert Miracle pleads guilty

[Demosthenes]

The Blotter

The Times' criminal justice team looks behind the scenes and behind the headlines.

September 25, 2009 at 11:40 AM

A Bellevue businessman who federal prosecutors say ran a $65 million pyramid scheme involving investments in Southeast Asian oil development pleaded guilty this morning to tax evasion and mail fraud in U.S. District Court in Seattle.

Prosecutors say Robert Miracle and two Malaysian men used money they took from some investors to pay others, all the while claiming they were helping develop vast tracks of oil-rich land overseas. They lied to investors, created fake financial statements and ginned-up false news releases to boast of success, when in fact Miracle and his alleged co-conspirators were living a "lavish lifestyle" and using investor funds in risky oil and gas development projects, the feds say.

Miracle, 49, was originally charged with nearly two dozen counts of conspiracy, mail fraud, wire fraud, money-laundering and tax evasion. He pleaded guilty to two charges and faces up to 25 years in prison and a $250,000 fine when he is sentenced.

Assistant U.S. Attorney Andrew Friedman has called the case one of the largest federal fraud prosecutions in the state's history, alongside the $91 million Znetix scheme and the $78 million offshore investment-club fraud run by John Wayne Zidar. Znetix founder Kevin Lawrence went to prison for 20 years. Zidar received a 30-year term.

The federal indictment alleged that Miracle operated a number of companies involved in oil development in Malaysia and Indonesia. The charges allege Miracle and others represented to investors that they were making money from oil fields in Malaysia and Indonesia, when in fact they were using money from one investor to pay another.

The charges allege that, of the $65 million reported taken in, about $36 million was paid back out to investors to maintain an appearance that the companies were successful.

Prosecutors allege Miracle took the remainder, more than $28 million, and used it to invest in failed oil and gas developments and to support a lifestyle that included the purchase of a $38,000 two-carat diamond ring, a $27,000 painting and a $77,000 weeklong cruise for 10 members of his family.

Miracle was also ordered to pay up to $28 million in restitution. He will be sentenced on Dec. 14.

[Arthur Rubin]

Is that his real name? I mean, that's just begging for a joke, such as "if you get a return on your investment, it's a ...."

[Demosthenes]

Bellevue businessman ‘ruined people’s lives’
By LEVI PULKKINEN, SEATTLEPI.COM STAFF
Published 03:37 p.m., Monday, May 23, 2011
A Bellevue businessman who lost $35 million of investor money in a oil-and-gas venture that became a pyramid scheme has been sentenced to 13 years in prison.
Robert Miracle’s Ponzi scheme “ruined people’s lives,” U.S. District Court Judge James Robart while sentencing the 50-year-old on Monday.

Miracle described himself as being too eager to please his investors, and too reluctant to give them bad news.
“My whole life I have been trying to prove that I am good enough, smart enough, successful enough, and equal to anyone else,” Miracle said in the May 10 letter. “I just did not understand that the underpinning of all of these things is integrity and honesty.
“I should have never been in the position of running this company. I did not have the right tools and I lacked the moral compass to be responsible for other people’s money.”

[Judge Roy Bean]

...

Miracle described himself as being too eager to please his investors, and too reluctant to give them bad news.
“My whole life I have been trying to prove that I am good enough, smart enough, successful enough, and equal to anyone else,” Miracle said ...