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DATE News (chronologically)
07/23/09
nascar
Grand-Am driver bilks Grand-Am & NASCAR drivers out of millions  UPDATE Grand-Am race-car driver Henri Zogaib told members of Daytona Beach's racing community that he hobnobbed with luminaries such as John McCain, Rudy Giuliani and Henry Kissinger.

He pledged more than $1million in donations to health-care and political causes and served on Florida Hospital Foundation's Executive Board.

Now, Florida Department of Law Enforcement agents say Zogaib, 36, and friend Paul Bellanca, 48, who manages Krispy Kreme franchises near Daytona Beach and Melbourne, ran a Ponzi scheme that bilked investors of at least $5.4 million, FDLE spokeswoman Susie Murphy said.

FDLE agents served warrants Wednesday at Bellanca's Sawtooth Lane home in Ormond Beach and Zogaib's beachfront condominium on South Atlantic Avenue in Ponce Inlet. Three other search warrants were served at banks where money received from investors may be held, Murphy said.

No arrests were made.

"I'm not getting any money back," said Grand Am driver Ryan Dalziel, who, along with his family, invested $550,000 with Zogaib. "I want him to go to prison. ... He's hurt and destroyed a lot of families."

Attempts to reach Zogaib and Bellanca by phone Wednesday were unsuccessful.

Names of investors were not released because of an ongoing investigation, Murphy said.

NASCAR driver AJ Allmendinger, who invested with Zogaib, said Zogaib displayed a flashy lifestyle to recruit investors. Allmendinger said he knew a handful of Zogaib investors. He was the only one of the group to get his money back.

"I'll be honest, he's a smooth guy," Allmendinger said. "He talks a big talk and basically puts on a great show with ... business, cars, women, etc."

Investigators seized computers, flash drives and files from the homes. It may take weeks to go through the evidence, Murphy said.

Zogaib and Bellanca advertised quick returns of 40 percent on investments in iron ore through Executive Investment Group LLC and Diversified Equity Investment Group LLC, according to Murphy and court documents.

Zogaib told clients making money would be simple, Allmendinger said.

"[He said,] 'Hey, I can easily make a double return on this investment.' Kind of one of those things if it seems too easy, it's got to be too easy," Allmendinger said.

As soon as Allmendinger got his money back, he deleted Zogaib's number from his cell phone. He never spoke with him again.

Zogaib no longer serves on Florida Hospital Foundation's Executive Board, a spokeswoman for the organization said. She could not confirm details of his donation.

Meanwhile, his finances are under assault.

Including Pickering's lawsuit, he owes $4million from three lawsuits in Volusia County Circuit Court.

He also faces foreclosure on his $700,000 beachfront condo and is being sued by American Express for a $103,628 credit-card balance.

Fifth Third Bank is suing him for a $673,878 default on a promissory note.  More at Orlando Sentinel

07/22/09 FDLE agents served two search warrants on homes in Ormond Beach and Ponce Inlet believed to be involved in the scam. Officers are searching for evidence as well as potential victims.

"Basically, the Ponzi scheme made investors believe that they could get them a guaranteed return on their investment up to 40.8 percent and they got them to invest their money and then used their money for their own personal gain. Our investigation is still in the process of collecting evidence and sorting through the different computers and everything else we found," FDLE agent Wayne Ivey said.

Ivey said Grand Am driver Henri Zogaib and Ormond Beach businessman Paul Bellanca worked together to convince clients to invest in iron and ore products through their two companies. Zogaib was able to gain credibility with NASCAR officials through his association with Grand Am racers and teams, the FDLE said.

No charges have been filed in the case and it may take weeks for any to be filed. 

NASCAR drivers were victimized as well as a top-ranking NASCAR official and a retired police officer Ivey said.

Authorities said the former officer invested his entire life savings of $500,000 and lost it all.

Investigators believe dozens of people fell victim to the scam and are searching for additional victims.

"NASCAR is learning about the allegations as well, and we are as eager as everyone else to learn about the facts of this case," NASCAR said in a statement released Wednesday.

The FDLE said anyone who invested with Executive Investment Group and Diversified Investment Group should contact the agency or the sheriff's office immediately. WKMG Orlando

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