Ex-USA Capital owner pleads guilty to wire fraud

In a surprise hearing, Joe Milanowski, 48, a former owner of USA Capital which failed owing $962 million to investors, pleaded guilty Tuesday to one count of wire fraud with the prosecution recommending he be sentenced to 12 years in prison.

U.S. District Judge Roger Hunt warned that he could sentence Milanowski up to 20 years in prison and fine him up to $250,000. Hunt also noted that he was not bound by the recommendation from the U.S. attorney’s office.

Milanowski is the only defendant named so far in a criminal case stemming from the 2006 collapse of USA Capital, a hard-money lender that solicited money from 6,000 individual investors and made loans to developers. However, the U.S. attorney’s office said the investigation is continuing.