Ronnie E. Bass Sr. has lost quite a few teeth over the years. Smoking crack and spending 21 months in jail did the damage. Rock also separated the old man from his computer-whiz son, whom he hasn't heard from since the early 1990s. Yet Pops takes in stride that his boy faces five federal felony charges for running a multimillion-dollar Ponzi game. "I never would have thought he'd be involved in something like that," he mumbles. "But people do all sorts of things. So you know how that goes."
Ronnie Eugene Bass Jr.'s capers appear to dwarf those of his father. A trial is set for June 1 on charges that the 37-year-old helmed an operation that stripped $14.3 million from more than 600 gullible investors, most of them Haitian-Americans in South Florida and New Jersey. Three alleged cronies in a bogus investment group called Homepals — Brian Taglieri, Michael Muzio, and Abner Alabre — have pleaded guilty to fraud and conspiracy charges in the past year. Taglieri and Alabre have each received five-year prison sentences.
Where Ponzi icon Bernie Madoff drained the ample accounts of the sweater-on-shoulders country-club set, the Homepals gang scraped away the hidden dollars of a people already beset by poverty and disaster. Both scams exploited the trust of insular communities. "It's what you call an 'affinity fraud,'" says Miami lawyer and Ponzi specialist David Rothstein, who in 2008 represented investors in a similar, $23 million scheme involving Haitian Ponzi artist George Theodule, who's serving a four-year prison sentence. "It's a situation where people prey on those with whom they share a common bond."
Bass, who attended Davie's Nova High School, heralded himself as "a master trader of stock options and commodities" with "years of experience and notable expertise," according to a criminal complaint. But that was false. In fact, his foray into trading began in June 2007, according to state records, when he founded Homepals Consulting Group LLC. It was located in a small home near NE 139th Street and 11th Avenue in North Miami Beach.
By April of the next year, he had made new friends — a motley trio of co-conspirators who helped him found a new company, called Homepals Investment Club. One of them was longtime buddy Alabre. Four years younger than his alleged mentor, he was a pudgy Miamian once arrested for beating his wife with a telephone. He became Homepals' "secretary" but was in effect Bass's second in command.
Taglieri, who's 49, was an amateur racecar driver from Jupiter who posed as the group's attorney, although he's not a lawyer.
And 46-year-old Tampa-based Mike Muzio, a bankrupt cigar bar entrepreneur on probation for grand larceny in New York state, specialized in the "pump" half of what prosecutors call a "pump and dump" operation. He bought a shell company called International Business Ventures Group in order to trade worthless stock with Homepals.
Alabre was the only Haitian-American among them. But the group targeted that community's investment clubs — groups of people pooling their cash, says Jack St. Fleur, a 29-year-old immigrant and mortgage broker. In April 2008, a friend told St. Fleur that the traders were guaranteeing they could double investors' cash in 90 days. "I didn't know about options and stocks and all that," St. Fleur says. "Much later, I attended a two-week business class and started to wonder: Man, in this market at this time, how could they do it?"
But by then, it was too late. St. Fleur had gone to work for Bass in the Delray Beach office on a 10 percent commission. He earned monthly checks ranging from $2,500 to $5,000 by convincing about 60 people, many of them friends and family, to invest in Homepals. Even his own parents lost $2,000. St. Fleur invested his own savings of $15,000. He also lost a $100,000 business loan from Wachovia. He claims Bass listed him in state records as a company officer of Homepals LLC without his knowledge. That seems possible. So far, St. Fleur has not been criminally charged.
Bass counted on greed to obscure common sense. Eliezer St. Armand, a registered nurse from New Jersey, lost his daughter's $10,000 college fund. He says it "wasn't very clear" how the group made its profits. "I didn't know whether it was a black-market business or what," he admits. "They told me they were doing some sort of online stock auctions. I was looking for an opportunity to make quick money.
"I would not think that my own people would steal from me. But now I know everybody's looking for an opportunity to put their hands in another man's pocket."
In reality, the white-collar swindlers were paying other investors and siphoning profits off the top, prosecutors say. "Bass used less than 10 percent of investors' funds for trading," reads one federal complaint. He suffered "losses of nearly 20 percent of the small portion of funds he did trade."
Homepals' bogus attorney, Taglieri, received an $8,000 monthly salary. He used $85,000 of investors' cash to pay child support, according to investigators. Bass and Alabre bought twin BMWs and spent $380,000 on a 3,000-square-foot house in Miramar.
Muzio invested roughly $25,000 of Homepals' funds into his shell company, but by November 2008, he was tired of the charade. "It costs money to maintain a stock and I'm the only idiot doing it," he complained in an email to his partners, later used as evidence by investigators.
It was then, only seven months into the Ponzi operation, that the wheels began to fall off. Homepals was down to its last $400,000 — against $12 million still owed to investors. On the day after Christmas 2008, Bass sent letters to investment club presidents lamenting that "as a consequence of heavy losses suffered," the company would not be able to repay investors until the next March.
He was stalling, says "business manager" St. Fleur. "Nobody would show up at the office, and I'd call them, and they wouldn't pick up," he recalls. "It was like, What is going on? Investors were on my phone, calling me a crook."
In October 2009, Bass was hit with the felony charges related to conspiracy and money laundering. Free on $50,000 bond, he faces up to 75 years in prison if convicted — although his clean criminal record will likely inspire leniency. Muzio, who will be sentenced April 29, faces a maximum of 190 years in prison.
The sentences are of little solace to victims like St. Armand, who's not sure if his daughter, an aspiring lawyer who was accepted to both Harvard and Columbia universities, will be able to attend. "The financial-aid people don't take Ponzi losses into account," he says.
He'll likely never be paid back. "We are hopeful of some recovery," says Robert Levenson, an attorney representing the feds in a civil lawsuit against the group. "Unfortunately, by definition, Ponzi-scheme cases collapse because the enterprise runs out of money."
But a message board of victims at pinkinvesting.com betrays dogged hope. "I just want my money back and for this to be over," says a commenter named Paul, "as if it was just a bad dream."