Grand-Am Rolex Driver Henri Zogaib Allegedly Ran Ponzi Scheme

FDLE: Daytona race-car driver, pal bilked investors
Losses total at least $5.4M, investigators say

By Willoughby Mariano, Tania Ganguli and Ludmilla Lelis Sentinel Staff Writers
July 23, 2009

Race-car driver Henri Zogaib told members of Daytona Beach's racing community that he hobnobbed with luminaries such as John McCain, Rudy Giuliani and Henry Kissinger.

He pledged more than $1million in donations to health-care and political causes and served on Florida Hospital Foundation's Executive Board.

Now, Florida Department of Law Enforcement agents say Zogaib, 36, and friend Paul Bellanca, 48, who manages Krispy Kreme franchises near Daytona Beach and Melbourne, ran a Ponzi scheme that bilked investors of at least $5.4 million, FDLE spokeswoman Susie Murphy said.

FDLE agents served warrants Wednesday at Bellanca's Sawtooth Lane home in Ormond Beach and Zogaib's beachfront condominium on South Atlantic Avenue in Ponce Inlet. Three other search warrants were served at banks where money received from investors may be held, Murphy said.

No arrests were made.

"I'm not getting any money back," said Grand Am driver Ryan Dalziel, who, along with his family, invested $550,000 with Zogaib. "I want him to go to prison. ... He's hurt and destroyed a lot of families."

Attempts to reach Zogaib and Bellanca by phone Wednesday were unsuccessful.

Names of investors were not released because of an ongoing investigation, Murphy said.

NASCAR driver AJ Allmendinger, who invested with Zogaib, said Zogaib displayed a flashy lifestyle to recruit investors. Allmendinger said he knew a handful of Zogaib investors. He was the only one of the group to get his money back.

"I'll be honest, he's a smooth guy," Allmendinger said. "He talks a big talk and basically puts on a great show with ... business, cars, women, etc."

Investigators seized computers, flash drives and files from the homes. It may take weeks to go through the evidence, Murphy said.

Zogaib and Bellanca advertised quick returns of 40 percent on investments in iron ore through Executive Investment Group LLC and Diversified Equity Investment Group LLC, according to Murphy and court documents.

Raced at Daytona
Zogaib placed 33rd place during the Grand Am Rolex race last year at Daytona International Speedway.

The Grand American Road Racing Series (Grand Am) is unrelated to NASCAR. But both racing organizations can share tracks such as Daytona's for their races, and a handful of racers drive in events on both circuits.

Bellanca is a racing enthusiast. The doughnut franchises he helped manage sponsored a Krispy Kreme Road Racing team for which he also drove. State records list him as manager of Diversified Equity Investment Group.

Meanwhile, Zogaib financially backed the Samax Racing team and also drove for it. He would arrive at Daytona International Speedway in Lamborghinis, Bentleys or Ferraris and hang out with the other well-financed racers of the Rolex racing circuit, according to documents filed in Volusia County Circuit Court. He is president of Executive Investment Group, state records show.

Zogaib told potential investors that he attended a private school in Switzerland with the chief financial officer of ArcelorMittal, the world's largest steel company, and knew people who taught him how to make high returns, court records state.

At a January 2008 news conference at the Daytona speedway, Zogaib pledged a seven-figure donation to Florida Hospital for Children in connection with the Rolex 24 race. The event featured a race car painted to promote the hospital in Orlando. Photos show Zogaib in a racing suit with a hospital logo stitched on it, the sign of a sponsor.

Prospective investors were invited to watch the race, said Bill Pickering, a Lake Mary investor who won a $1.85 million judgment against Zogaib in March. Pickering sued after Zogaib repeatedly failed to return his $550,000.

'Double return'
Zogaib told clients making money would be simple, Allmendinger said.

"[He said,] 'Hey, I can easily make a double return on this investment.' Kind of one of those things if it seems too easy, it's got to be too easy," Allmendinger said.

As soon as Allmendinger got his money back, he deleted Zogaib's number from his cell phone. He never spoke with him again.

Zogaib no longer serves on Florida Hospital Foundation's Executive Board, a spokeswoman for the organization said. She could not confirm details of his donation.

Meanwhile, his finances are under assault.

Including Pickering's lawsuit, he owes $4million from three lawsuits in Volusia County Circuit Court.

He also faces foreclosure on his $700,000 beachfront condo and is being sued by American Express for a $103,628 credit-card balance.

Fifth Third Bank is suing him for a $673,878 default on a promissory note.

Investigators are looking for more investors. Anyone with information is asked to contact FDLE.

 

Either an uniformed, misled or complicit writer.

http://www.nascar.com/2008/news/headlines/official/09/04/nascar.grand.am/index.html

NASCAR Holdings reveals plan to acquire Grand-Am
Partnership allows sharing of resources with NASCAR
By Official Release
September 4, 2008
04:25 PM EDT

DAYTONA BEACH, Fla. -- NASCAR Holdings on Thursday announced an agreement to acquire the Grand-American Road Racing Association (Grand-Am). The future move will allow for resource sharing between Grand-Am and NASCAR while both organizations continue to operate independently. NASCAR Holdings is the legal operating entity that includes the National Association for Stock Car Auto Racing (NASCAR) and many of its subsidiaries.

blah, blah, blah...

 

For yourself or a client? How did it turn out?