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Ponzi Concert Promoter Gets Nine Years

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Miko Dion Wady.
Miko Dion Wady, Who Claimed To Have Put On Concerts For U2, Jamie Foxx, Also Must Pay $30 Million

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By Brad Hamilton
Modern Times Magazine

Nov. 17, 2011 — In a sentencing sure to warm the hearts of the investors he bilked, Miko Dion Wady, 36, of Phoenix was sentenced this week to nine-years imprisonment, ordered to pay $30 million, perform 250 hours of community service and forfeit a boatload of expensive toys, like a 41-foot boat, a fifth-wheel trailer and a Ferrari.

About 140 people across the country lost $30 million to Wady and his cohorts. After his indictment last year, Wady eventually pleaded guilty to five counts of wire fraud and five counts of transactional money laundering.

The scam that captured the investors was a classic ponzi scheme where those running the game used investment money from new investors to pay off initial investors. Such operations usually break down when the number of new investors — and the amounts they are investing — falls below what is needed to pay off the earlier investors.

Wady lured investors by manufacturing his part in concert events by some of the biggest names in music. Wady claimed to have promoted concerts for The Rolling Stones, U2, Barbara Streisand, Faith Hill, Tim McGraw, Mariah Carey, George Strait, Billy Joel, Jamie Foxx, Jimmy Buffet, Mary J. Blige, Pearl Jam, and at least 30 other well known artists and entertainers.

In actuality, during the time when he was touting his role with the big acts, Wady promoted fewer than 10 concerts, all involving only local or lesser known artists.

“This individual sought to profit by creating a sophisticated money laundering scheme designed to scam investors out of their money,” said acting U.S. Attorney Ann Birmingham Scheel. “The court’s stiff sentence reflects the seriousness of his crime and this office’s resolve to prosecute individuals who profit from unsuspecting investors.”

In the course of his guilty plea, Wady admitted that he operated and had an ownership interest in various business enterprises that purportedly were engaged in the business of promoting concerts or tours of well known entertainers and artists. The enterprises included Dezert Heat Entertainment, Inc.; Dezert Heat, Inc.; Dezert Heat Worldwide, LLC; NATO Enterprises, LLC; and NATO Entertainment, LLC.

Wady also utilized TransCapital, LLC, based in Mesa, Ariz., which was operated by James Cundiff and his two sons, Adam and Jeremiah Cundiff. TransCapital was allegedly established solely to secure “investment” financing for the concerts and tours purportedly being promoted by Wady. The indictment states Wady later used Dezert Heat Worldwide, another joint venture with the Cundiffs, for the same purposes.

The indictment purports that from August 2004 through March 2007, the Cundiffs, through TransCapital or Worldwide, entered into loan and event funding agreements with more than 250 victim investors, and obtained no less than $50 million dollars to finance approximately 150 concerts or concert tours purportedly being promoted by Wady. Allegedly victim investors were typically promised interest rates of four per cent per month for a maximum of six months or 24 per cent for one promoted event.

The indictment alleges that Wady had no association or contractual arrangement with any of the significant concerts or tours, and the investor funds given to Wady from the Cundiffs were never actually used as represented to the victim investors. Most of the funds were instead allegedly returned by Wady to the Cundiffs within a short period of time, typically one or two days, under the guise that these repayments represented the net proceeds from some other concert or tour that was recently completed.

James Cundiff, 61, was sentenced in March to two-years in federal prison and ordered to pay more than $300,000 after pleading guilty to money laundering.

It is alleged that between 2004 through March 2007, Wady used approximately $3 million dollars of victim investor funds to pay for a lavish personal lifestyle. During this period, Wady allegedly purchased at least 30 vehicles for himself and others, including a Lamborghini, a Ferrari and a Bentley. Wady allegedly also purchased a $175,000 luxury 41 foot boat and $800,000 in real estate. All of these purchases were purported to be paid from funds he obtained from victim investors.

Brad Hamilton is a freelance writer from Tempe.
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