Authorities say Sarasota asset manager committed new frauds while awaiting prison
Even as he faced five years in prison, Steven R. Zoernack kept trying to scam new victims, authorities say.
The Sarasota County resident, sentenced in October after pleading guilty to bilking investors out of $3.4 million, was arrested last week after prosecutors said he continued to defraud people with a commercial loan scheme.
Zoernack, 55, had been released after sentencing pending assignment to a federal prison. But after the U.S. Attorney's Office filed a motion claiming he was duping new clients, U.S. District Judge Susan Bucklew revoked his release.
"It is clear that Zoernack poses a danger to the community," the judge stated in an order.
According to the U.S. Attorney's Office, before and after his guilty plea Zoernack posed as a commercial loan broker — calling himself Steven Reiner, using his middle name — and solicited new customers to pay him to arrange for commercial loans from third-party lenders. He failed to disclose that he had been convicted of wire fraud in federal court in New York in 2007 and that he had pleaded guilty to conspiracy to commit wire fraud in Florida in March.
At his sentencing last month, he was ordered not to engage in business activities under an assumed name.
Details of the latest scam remain under seal in federal court in Tampa.
U.S. marshals arrested Zoernack on Nov. 15, and he is being held in the Pinellas County Jail.
Zoernack had managed multiple hedge funds that prosecutors say raised more than $6 million from at least 40 investors. However, he siphoned off some of those funds for personal uses and non-business expenses.
His advisory firm, EquityStar Capital Management LLC, marketed the hedge funds to investors in the U.S. and Canada from offices in Sarasota and Newport Beach, California.
In soliciting investors to the funds starting in August 2012, prosecutors said Zoernack never revealed numerous material facts about himself and the hedge funds, including a previous wire fraud conviction, a bankruptcy filing, a history of tax liens and adverse money judgments and the fact that he still owed hundreds of thousands of dollars in restitution to past fraud victims.
“In fact, Zoernack actively sought to conceal his past by misappropriating fund assets to pay an online reputation manager to manipulate internet search engine results about him to prevent potential investors from learning of his past. He also routinely lied about his educational background, his expertise as an investment manager and his experience in the financial industry," prosecutors charged.
As part of his guilty plea, he was ordered to forfeit $2.8 million in ill-gotten gains and to make $3.4 million in restitution to victims.
This article originally appeared on Sarasota Herald-Tribune: Authorities say Sarasota asset manager committed new frauds while awaiting prison
