Two Suffolk men have been indicted along with a Pennsylvania man on larceny and scheme to defraud charges, prosecutors said, alleging the men launched a plot to steal millions of dollars from investors hoping to help fund a new social media platform.
Kenneth Martino of Huntington, Timothy Mueller of Greenport and Jared Widman of Harvey’s Lake, Pennsylvania, face multiple charges of first-, second- and third-degree grand larceny and first-degree scheme to defraud, according to a news release issued by Suffolk District Attorney Thomas Spota.
Mueller and Widman were arraigned before State Supreme Court Justice Fernando Camacho on Tuesday, while Martino is scheduled to be arraigned Wednesday in First District Court in Central Islip. Mueller and Widman are due back in court Dec. 7, court records show.
Two of the suspects’ attorneys could not be reached for comment, but Mueller’s attorney, Joseph W. Ryan Jr., of Melville, said his client was a victim.
Prosecutors claim that they told investors they were launching the next big social media platform, but instead used some $5 million of the money on luxury vehicles, golf club fees, tickets for sports events, gambling expenses and credit card bills.
They claimed that their internet project was sponsored by Staples, the office supply store, and MySpace, a social media business, prosecutors said. But none of the investors’ money was used for the business and the defendants had no connection to MySpace or Staples, prosecutors said.
“By using high pressure sales tactics, including claims that ‘short term funding’ was desperately needed to complete the project or it would fall apart, these defendants were successful in pressuring their victims into giving in excess of $5 million,” Spota said in the release.
Mueller, 54, pleaded not guilty to one count of first-degree grand larceny, five counts of second-degree grand larceny, three counts of third-degree grand larceny and two counts of first-degree scheme to defraud, prosecutors said. He was being held on $250,000 cash bail or $750,000 bond.
“Mueller asked the Judge to set a January 2017 trial date to prove that he is “Not Guilty,” and, to the contrary, that he is a victim who lost over $228,000 by contributing to the venture,” Ryan wrote in a statement. “Judge Camacho was further informed that since July 2014, Mr. Mueller has been cooperating with the District Attorney’s Office. After granting an interview, Mr. Mueller furnished 105 emails and 27 documents to assist the prosecution in fixing responsibility for the alleged fraud scheme.”
Ryan added that Spota’s office requested extraordinarily high bail despite knowing Mueller’s financial condition and speculated that the tactic was used to intimidate Mueller into implicating the two principals.
Widman, 32, pleaded not guilty to first-degree grand larceny in the first degree, eight counts of second-degree grand larceny, four counts of third-degree grand larceny and two counts of first-degree scheme to defraud, prosecutors said. He was being held on $250,000 cash bail or $750,000 bond.