Man charged with bilking Katrina victims

A man who already served prison time for mail fraud has been indicted in a scheme that bilked more than 900 investors, including Hurricane Katrina victims, out of $8 million, the U.S. attorney's office said Thursday.

David McDowell Robinson, 56, of Baltimore was arrested Thursday, a day after a federal grand jury indicted him on wire and mail fraud charges.

Robinson served nearly nine years in federal prison for mail fraud arising from three different schemes and was released in April 2003. Prosecutors allege that he launched a new company, Liberty Trade International Inc., the next year and began scamming investors again.

The company solicited investments of up to $10,000 and promised returns of up to 30 percent, saying it would provide short-term "gap financing" to homebuyers or to people refinancing their homes to generate the returns.

Robinson instead paid investors with funds received by other investors, creating a classic Ponzi scheme, prosecutors said.

Among his alleged victims were residents of the Mississippi Gulf Coast who endured Hurricane Katrina. The indictment says that he sent an employee to Gulfport, Miss., in January 2006, to make a presentation about Liberty Trade, and that the company received about $80,000 in investments.

Robinson has been incarcerated since last March for violating the terms of his parole by running a business, said Joseph L. Evans, his federal public defender.

Robinson maintains his innocence, said Evans, who declined to comment on the facts of the case because Robinson may hire a different lawyer.

He faces five counts of wire fraud and 14 counts of mail fraud. If convicted, he faces a maximum sentence of 20 years in prison and a $1 million fine for each charge.

The indictment alleges that Robinson spent $600,000 of his investors' money on personal items, including jewelry and furs for a girlfriend, and down payments and lease payments for luxury cars.