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Pennsylvania man wanted in federal 'Ponzi' scheme found in Harford

Justice SystemTheftBJ's Wholesale Club Inc.Maryland State PoliceFBI

A Pennsylvania man, under indictment on federal charges for allegedly running a major "Ponzi" scheme, was recently arrested in Harford County on unrelated theft charges and then quickly whisked away by federal marshals.

Istvan A. Merchenthaler, 42, is under federal indictment, charged with defrauding investors of more than $2 million by claiming to run a company called PhoneCard USA from at least May 2006 to about September 2011, according to a May press release from the U.S. Attorney's Office for the Eastern District of Pennsylvania in Philadelphia. As of Thursday afternoon, Merchenthaler remained in federal custody, a spokesperson for the office said.

Harford County District Court Judge Victor Butanis agreed to immediately release him to federal marshals after a bail review on the theft charge was held in Bel Air on Feb. 19.

According to the federal indictment, Merchenthaler, also known as Steve Merchenthaler, got investors to sign on to PhoneCard USA, billed as a "premier distribution source" for prepaid phone cards and cell phones that had contracts with Walmart, 7-Eleven and BJ's Wholesale Club, among other major retailers.

He allegedly told people their investments would finance the "exponential growth" of the company and provide them with "generous returns," while actually having no contracts.

He is charged with four counts of wire fraud, one count of aggravated identity theft and two counts of money laundering, Philadelphia U.S. Attorney Zane David Memeger said in the press release.

If convicted, he faces a mandatory minimum of two years and a maximum sentence of 102 years in jail, a three-year period of supervised release, a $1.75 million fine and a $700 special assessment.

The case is being investigated by the FBI and the Internal Revenue Service Criminal Investigation Division.

Merchenthaler was living in Downingtown, Pa., at the time of his indictment, according to the Philadelphia U.S. Attorney's press release, while Maryland court records list him as living in the 4400 block of Madonna Road in Street.

In the Harford case, he was charged in a Feb. 15 incident of unlawful taking of a motor vehicle and stealing between $10,000 and $100,000. He was arrested by Maryland State Police on Feb. 16, according to court records.

During the Feb. 19 bail review, where Merchenthaler was seen from the Harford County Detention Center via closed-circuit TV, guards at the detention center cleared the room of defendants for Merchenthaler's bail review because they said he was a security risk.

"This suspect was a skilled fighter, martial arts, high risk inmate," Sheriff's Office spokesman Eddie Hopkins wrote in an e-mail explaining the situation. "The deputies cleared the CCTV room as he was a risk to anyone who was in there with him."

Merchenthaler told Butanis he was living in Street but has been homeless for four months and has not been allowed to work since being indicted in federal court.

Public defender Bruce Andres said Merchenthaler had worked as a dental technician and had no previous convictions or failures to appear in court.

Assistant State's Attorney Christopher Tabone asked for him to be released to federal marshals, which Butanis agreed to do.

Copyright © 2014, The Baltimore Sun
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Justice SystemTheftBJ's Wholesale Club Inc.Maryland State PoliceFBI
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