On behalf of Thomas Costello of Costello Law Group

Garry Milosevich of Duluth, Minnesota pled guilty on January 17, 2013 to mail fraud in the U.S. District Court for the Western District of Wisconsin. Milosevich was indicted on April 19, 2007, but remained at large until he was found in Honduras in January 2012. The indictment alleged that Milosevich solicited individuals to invest in a “prime back guarantee” under the company names Rainbow Management Trust and Interstar Management Limited. Milosevich, and his co-defendant Daniel Tepoel, mailed promotional materials to potential investors assuring a high rate of return from a principal balance that would never be at risk.

Milosevich enticed dozens of individuals to invest millions of dollars in his Ponzi scheme, which was used to buy personal items and a failing condominium resort in Grenada. To maintain the deception that the investments were profitable, Milosevich sent his clients quarterly reports showing high gains on their investments. These gains were of course completely fiction. When an investor would ask for their returns, Milosevich gave numerous excuses as to why the money wasn’t available. In the end, investors lost a total sum of approximately $2.5 million dollars in these “prime back guarantee.”