SAN FRANCISCO – Federal authorities arrested Michael Steven Banuelos on Thursday after a federal grand jury in San Francisco indicted him for wire fraud and money laundering resulting from his operation of an alleged investment scheme through which he defrauded investors out of more than $2 million, United States Attorney Melinda Haag announced.

According to the indictment, Banuelos, 41, falsely claimed to victims that he could arrange – and in fact had arranged – lucrative business deals for aspiring musicians. Banuelos allegedly convinced his victims to invest substantial amounts of money, and he promised high rates of return on those investments once the purported entertainment contracts came to fruition.

Instead of using the more than $2 million he received from investors to secure these purported deals, however, Banuelos allegedly used most of the funds on personal expenses, including alimony, luxury cars, private jets, a country club membership, and expensive clothing and jewelry.

Banuelos was arrested in Chicago. He recently relocated there after having lived in and around Atlanta for many years. Banuelos appeared in federal court in Chicago this morning, and his next scheduled court appearance is in Chicago on Monday, July 30. He is in custody.

The maximum statutory penalty for each count of wire fraud, in violation of 18 U.S.C. § 1343, is 20 years in prison plus a $250,000 fine. The maximum statutory penalty for the money laundering count, in violation of 18 U.S.C. § 1957, is 10 years in prison plus a $250,000 fine. Any sentence following conviction, however, would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.