An Independence man who bilked victims out of $14 million in a musical instrument scam 20 years ago faces 5 to 15 years in prison if convicted on fresh felony charges.
Michael S. Burnos, 72, is charged with receiving stolen property and engaging in fraud or misrepresentation in the offer, sale or purchase of securities.
Jackson County Prosecuting Attorney Jean Peters Baker filed a complaint against Burnos Wednesday in county circuit court.
Baker’s office responded to a referral from Missouri securities officials. They had investigated an 82-year-old man’s complaint against Burnos and found Burnos had taken $66,700 from his sole victim and used the money in part to pay off his own payday loans.
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Missouri officials also believe Burnos used some of the money for legal fees from his personal bankruptcy.
The state agency levied $133,481.20 in penalties, restitution and investigation costs against Burnos in that civil case.
Officials said Burnos had promised that the money would be used to buy and sell collectibles at a profit of more than 20 percent. He’d provided hand-written receipts to the victim over a few years. He’d also told the victim that some others involved the deal were with the mafia.
The scam that Burnos ran 20 years ago had lasted nine years before its discovery. In it, he had taken 1,342 victims for more than $14 million.
Burnos had told those victims that he was buying and reselling musical instruments for a profit. Instead, he took in money from victims and then paid them off with money taken from subsequent victims, which is widely called a Ponzi scheme.
A federal judge had sentenced Burnos to more than seven years in that case, something he failed to tell the investor in his new scheme, the state said.