SEDONA, Ariz. — A jury has convicted an Arizona couple of cheating investors by claiming to have developed computer technology that was advanced enough to compete against Microsoft.
Michael Feinberg, 73, and Betty Feinberg, 80, have been found guilty of securities fraud after they used their firm, Catharon Software Corporation, to swindle more than $5 million in fraudulent investments.
While living in Sedona in the 2000s, the Feinbergs made misleading advertisements about Catharon Software to investors, claiming the company was capable of generating $2 billion in revenue within a 3-year span.
Prosecutors said the Feinbergs pitched Catharon's technology as being the "first major breakthrough in computer languages in thirty years," court records show.
The couple further claimed their technology could rival Microsoft's products and was "accepted by Internet users as an alternative to established programming languages."
But prosecutors claim the grandiose advertisements for the so-called "revolutionary" software were only a ruse to trick investors.
"...they knew such representations were false because Catharon never had the capability of launching its technology nor the ability to generate these significant revenues or returns on investments," prosecutors wrote in court records.
An employee told investigators that Catharon's technology was a "heap of junk" and had "no basis for functionality as a usable program," court records show.
The Feinbergs allegedly pocketed at least $858,000 of the investor funds and paid themselves a salary of $375,000.
Their victims included friends and associates recruited through various community organizations in Sedona, the U.S. Attorney's Office said.
The couple was convicted of one count of conspiracy to commit securities fraud, one count of conspiracy to commit wire fraud, and five counts of securities fraud. They're scheduled to be sentenced on June 15.
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