San Diego businessman says he was duped by LV scheme

Brian Seals

Wednesday, April 29, 1998 | 10:30 a.m.

A San Diego man who established a company to raise capital for a firm authorities believe was running a Ponzi scheme says he was just as misled as other investors.

Michael Anderson created Financial Growth Consultants to raise funds for Affordable Media, doing business as the Sterling Group of Las Vegas.

Three principals of the Sterling Group have been charged with racketeering, conspiracy and securities violations. The Sterling Group is also the target of a string of civil suits, some of which name Anderson and his company as a defendant, seeking to recoup tens of millions of dollars.

In papers filed Tuesday in federal court, Anderson said he checked the background of the company and its chief, Eric Stein, before raising funds. He eventually invested some of his own money in Sterling.

"Had any of us suspected a Ponzi scheme, we would not have used our own money to purchase media units," Anderson's statement to the court says. "We have been duped like the rest of the media purchasers."

The Sterling Group marketed units of television commercial time at $5,000 per unit. The time was to be used to advertise impulse items and investors were to receive a cut of the proceeds. Initially, investors saw returns of up to 50 percent in a 60-day period, which enticed other investors. By the early part of this year, however, investors allegedly were not getting their money back.

Stein has been charged and is still being sought by authorities along with Phil Balestrieri of San Diego. Stein's stepdaughter, Ina Bell, was charged and is free on bail.

On April 15, Stein issued a letter on the company's letterhead that has a Las Vegas address saying the company was troubled, but was getting back on track. The letter was postmarked from Denver, according to investor Eddie Tomaszewicz of New Jersey.

Several lawsuits have been filed by investors in both county and federal court as well as one by the Federal Trade Commission.

An affidavit filed in one of the civil suits by Hiroshi Stephens, who worked at Sterling as a consultant.

"I discovered investors were being paid from the money coming in from ongoing investors," Stephens affidavit states.

Stephens said when he asked Stein how investors were being paid a 50 percent return, and salesmen a 45 percent commission, Stein said the money was coming from the sale of Sterling items and from sales of pornographic videos from another company.

Stephens parted ways with the company. Anderson and his wife, Denyse, also parted ways with Sterling, sending the company a letter terminating their relationship March 10.

Sterling assets have been frozen as have those of companies operated by the Andersons. Anderson is seeking to have assets of his companies not related to Sterling freed. In a motion, he says his Inter Com Business Consultants will have to close if the assets aren't freed, resulting in 40 people losing their jobs.

A hearing on Anderson's case is set for Thursday, though court officials said Tuesday afternoon a continuance has been requested.