A 45-year-old Palm Coast man is being held on $1 million bail in the Flagler County Inmate Facility after being charged with money laundering and structuring.
Michael Stevens was arrested at his home Wednesday on a warrant charging him with money laundering in connection with a Flagler County-based business known as Dark Hawk Enterprises, LLC.
The charging affidavit says that from 2003 to 2011, Stevens was registered as the president of the business, and Anthony Fregenti, also of Palm Coast, was listed as a manager and associated dealer. Fregenti was arrested in September 2010 on a warrant charging him with running an organized scheme to defraud.
In that instance, Fregenti was charged with being involved in a fraud scheme where either vehicles or motorcycles were to be purchased and sold overseas to a Saudi Arabian prince. Investors gave Fregenti money to buy the cars with the promise of a return on the investments once the vehicles were sold, according to investigators.
Stevens is charged with taking money from Fregenti and running it through the Dark Hawk Enterpries, LLC, and Dark Hawk Cycles, LLC, before returning it to Fregenti and to himself for his personal use. Both men were listed with the companies as either agents or managers.
Under the investment fraud scheme, Stevens was to have purchased motorcycles and later sell them to buyers with a return of the profit going back to the investors. No motorcycles were ever purchased and the investors never saw their money again.
Stevens is charged with taking money from Fregenti and running it through the company, before returning it to Fregenti.
Investigators with the Sheriff's Office partnered with Investigators from State Attorney R.J. Larriza's office to investigate the business dealings when investors began complaining that they were not seeing any returns from their investments.
One couple invested some $166,000 with Dark Hawk Enterprises, LLC, which led to Stevens' arrest, investigators said. They said Stevens siphoned $85,000 of the money to pay a "floor plan," a debt incurred for motorcycles he had already purchased and sold, but had used the money profits.
Detective Nate Flach, of the Flagler County Sheriff's Office, said Stevens took the couple's money and deposited it into the business account. He then would withdraw money in increments of $9,000 to avoid a federal transaction reporting requirement and spent the money for his and Fregenti's personal use, investigators said.
"There were many people duped by these two men and many who lost large sums of money that they couldn't afford to lose," said Sheriff Donald Fleming. "We were able to partner with the state attorney's office to investigate this operation and collect enough evidence to finally charge Mr. Stevens."
Investigators said additional charges are pending as the investigation continues.