A federal judge stuck to his promise Tuesday of a tougher prison sentence for a conman than even the government sought. Michael “Ferrari Mike” Banuelos got six and one-half years in prison for running an investment scam that garnered him roughly $2.6 million over three years.
U.S. District Judge William Alsup twice postponed the Banuelos sentencing to him time to oppose Alsup’s sentencing plan or junk a plea deal with the government and go to trial. In the end, Banuelos went along with the sentence 18-months longer than the government offered in the plea bargain. But it was still less than the seven years Alsup originally proposed. He pled guilty in February to a single count of wire fraud.
Letters from victims who believed Banuelos claims that he could negotiate big ticket music deals made the difference for Alsup. He read them all, he said, and didn’t think the government was asking for enough prison time with a five-year term. (Banuelos has already spent 10 months in prison awaiting resolution of his case.)
Banuelos defrauded multiple investors of $2.6 million in three years. He told his victims he was a “player in the music business” and had a professional relationship with megastar Ludacris, that he could promote a young artist to stardom and investors stood to make huge profits on a record contract. He claimed to be negotiating for a $13 million deal with Def Jam Records and even held conference calls in which imposters pretended to be executives from Def Jam.
He used the money for luxury cars, private jets, country club memberships and expensive clothing, according to the government.
As his music scam was coming to an end, Banuelos defrauded other investors out of an additional $200,000 by falsely claiming he was a money manager. One victim entrusted him with $45 million for investment, according to the government.
“In a nutshell, Mr. Banuelos has shown he is a pathological liar and I can’t see any redeeming features. I think he is a danger to society, swindling other people of their money so he could live in a chateau, driving a fancy car and drinking,” Alsup said during a hearing last week.
Case: U.S. v. Banuelos, CR12-561WHA