He promised his retiree investors triple or quadruple their money back — but instead he went on a million-dollar spending spree with their cash, federal prosecutors said.
Isaac Grossman, 37, of Parkland, was arrested Friday and is facing fraud and money-laundering charges for spending an estimated $1.3 million on jewelry, luxury cars, and gambling, U.S. Attorney Ariana Fajardo Orshan announced in Miami.
According to the indictment, Grossman raised about $2.4 million between September 2014 and April 2018 for Dragon-Click Corporation. As president of the company, Grossman solicited investments from dozens of mostly elderly retirees across the country.
He told potential investors that Dragon-Click was developing an app that would revolutionize internet shopping.
Grossman claimed the app would allow a customer to upload a picture of any item they wanted to buy, find every retailer offering that item for sale, provide price comparisons and then link to retailers’ websites where the customer could purchase the item.
Grossman told potential investors they would double, triple, or quadruple their investments, and that Dragon-Click was on the verge of being sold to a larger technology company, such as Google, Apple or Amazon, for over $1 billion, prosecutors said.
He also told investors that their investment money would be used to complete the technological development of the Dragon-Click internet application, to pay legal fees related to the patent application process and to close the sale of the application to a large technology company, investigators said.
Instead, Grossman spent at least $1.3 million of investors’ money on gambling, diamond jewelry, luxury cars, tuition payments for his children’s private education, and other personal expenditures, the indictment stated.
Among other transactions, Grossman spent $35,000 on a 4.81 carat diamond ring, $21,200 for a lease on a McLaren MP4-12C, $36,500 to buy a Chevrolet Corvette, and $34,500 to partially pay off his mortgage.
The indictment also alleges Grossman failed to tell investors he had been permanently barred by the Financial Industry Regulatory Authority from acting as a broker-dealer, among other things, and that he had been ordered to pay nearly $122,000 in restitution.
If convicted of conspiracy, wire fraud, and mail fraud, Grossman faces a maximum sentence of up to 20 years for each charge and up to 10 years in prison for each money-laundering charge.
