An Arizona concert promoter accused of running a Ponzi-like scheme to rip off hundreds of investors over a three-year period was arrested Jan. 6 on fraud and money laundering charges.
The U.S. Attorney’s Office in Phoenix announced Miko Dion Wady of Dezert Heat Entertainment faces 37 counts of wire fraud and money laundering stemming from the alleged scheme operated from 2004 through 2007.
Wady allegedly conned $25 million from 140 investors by claiming to have promoted shows and tours for top artists such as Faith Hill, Tim McGraw, Barbra Streisand and Mariah Carey to secure financing when in reality he’d only promoted about 10 concerts for local or lesser-known artists.
The investors were to be repaid with substantial interest – allegedly 4 percent per month – from ticket sales but those payments never materialized.
The U.S. Attorney’s Office also claims Wady used about $3 million of investor funds to maintain a lavish lifestyle that included luxury cars, a 41-foot boat and real estate.
Eighteen investors filed lawsuits against Wady and his then-partners, TransCapital President Jim Cundiff and his sons, Adam and Jeremiah, in 2007. The suits claimed the partners maintained the illusion of success by taking investors backstage, giving them concert memorabilia and entertaining investors at after-hours parties.
The Cundiffs filed a separate lawsuit in 2007 against Wady and Dezert Entertainment, claiming the promoter orchestrated the scheme and that they and investors they brought in were owed $35 million.
Steve Mahaffy, the Cundiffs’ attorney, said the family is cooperating with the federal investigation.
“We were duped,” Mahaffy said. “The Cundiffs were duped by Miko Wady just like all the investors. When the Cundiffs learned of Wady’s Ponzi scheme, they went right to the federal authorities.”
If convicted of wire fraud, Wady faces a maximum penalty of 20 years in a federal prison, a $250,000 fine or both. A money laundering conviction has a maximum penalty of 10 years in prison, a $250,000 fine or both.