INTERNATIONAL MONEY LAUNDERER SENTENCED TO 7 YEARS, 3 MONTHS IN PRISON

A man convicted of international money laundering for helping a Southern California-based investment company bilk more than 700 investors out of $21 million was sentenced today to 7 years, 3 months in federal prison and ordered to pay $5,856,606 in restitution.

Michael Colello, 50, of New Rochelle, New York, who has been convicted of transferring $4.7 million in investor funds to secret Swiss bank accounts, covertly repatriating more than $1.3 million to the United States, and obstructing a Securities and Exchange Commission lawsuit to recover victim funds, was sentenced late today by United States District Judge Robert M. Takasugi in Los Angeles. In addition to the prison term and restitution, Colello was ordered to pay a $15,000 fine.

Colello pleaded guilty on September 6, 2002, to aiding and abetting wire fraud, international money laundering, eight counts of obstructing an SEC proceeding, criminal contempt of a court order that required him to disgorge $2,620,598 in illegally obtained funds, and fleeing on the eve of his trial.

Colello was scheduled to go to trial on January 9, 2002, but fled five days before chartering a private jet to fly from New Jersey to Florida. The FBI arrested Colello at an airport in Key West, Florida after he tried to hire a boat to take him to the Bahamas. At the time of his arrest, Colello was using a fake Hungarian passport and traveling under an alias.

Colello was the sixth defendant to be convicted and third defendant to be sentenced in connection with this investor fraud scheme. The two former owners of Cross Financial Services, Douglas Cross and Owen Fox, were each sentenced to more than 10 years in prison in December 2001 for devising the scheme to defraud the company's investors and then launder part of the stolen funds through Switzerland.

Douglas S. Cross, 51, formerly of Laguna Niguel and presently in federal custody at the United States Penitentiary in Lompoc, California, was sentenced to 10 years in federal prison and ordered to pay more than $8.7 million in restitution to the victims of the scam.

Owen R. Fox, 58, of Hawthorne, was also sentenced to 10 years months in federal custody and ordered to pay more than $7.8 million in restitution. He is presently in federal prison in Forrest City, Arkansas.

Following a 2½-month jury trial in 2001, Cross and Fox were each convicted of conspiracy, securities fraud, mail fraud, money laundering, and Fox was also convicted of obstruction of justice.

This case is the result of an investigation by the Federal Bureau of Investigation, Ventura Resident Agency, which received substantial assistance from the Pacific Regional Office of the Securities and Exchange Commission.