Marietta author charged with multi-million-dollar scam

By Bill Rankin

The Atlanta Journal-Constitution

Mitchell A. Gross first won over their hearts and then went after their loaded bank accounts, federal authorities said.

Gross, a fiction writer from Marietta who used the pen name "Mitchell Graham," was charged this week of bilking women he met on an Internet dating service out of millions of dollars. He was arrested Thursday morning by IRS agents and on Friday was ordered detained without bond pending trial.

A 61-year-old disbarred lawyer, Gross has pleaded not guilty to federal charges of wire fraud and money laundering. Gross wrote a trilogy of fantasy fiction books -- "The Fifth Ring," "The Emerald Cavern" and "The Ancient Legacy" -- that were released between 2003 and 2005.

A year after the final book was published, Gross began a romantic relationship with a woman identified in the federal indictment as "R.J." after they corresponded with each other on an Internet dating service.

Gross told the woman he was independently wealthy, thanks largely to a broker he said was named "Michael Johnson" and who was employed by "The Merrill Company," the indictment said. Johnson turned out to be an alias used by Gross and the company did not exist, authorities said.

Before R.J. invested her money, she telephoned Johnson, using a number supplied to her by Gross. Although the woman thought she was talking to Johnson, she was actually talking to Gross, who was disguising his voice, prosecutors said.

The woman, convinced she was making a legitimate investment, then wired about $2.9 million to an account controlled by Gross, the indictment said. Gross later mailed phony IRS and account statements to the woman to conceal the fraud scheme, according to court documents.

After the IRS launched an investigation of the case, agents learned Gross was using some of R.J.'s money to send payments to a former girlfriend of Gross' identified as "J.S." in the indictment. J.S. had previously been persuaded by Gross to invest $1.4 million into The Merrill Company, prosecutors said.

The Internet "makes it simpler for those bent on defrauding others to find their next victim," U.S. Attorney Sally Yates said. In this case, she added, Gross allegedly got unsuspecting victims to transfer millions of dollars into bank accounts he controlled to pay back previous victims and to enrich himself.

Gross was appointed a federal defender after he testified Thursday that he had only $2,000 in cash, no bank accounts or retirement accounts and $20,000 equity in a 2006 Chevrolet Corvette and a 2009 Hyundai Genesis. He said he does not own a home and now lives with a fiance.

During Friday's bond hearing, Assistant U.S. Attorney Steven Grimberg noted that Gross was convicted of insurance fraud in 2000 and was recently arrested for illegally possessing firearms because he is a convicted felon. Last month, Gross was indicted in Cobb County for possessing a .38-caliber handgun and a Smith & Wesson Long Rifle, according to court records.

At the close of the hearing, U.S. Magistrate Christopher Hagy, noting that Gross traveled to South America twice in the past two years, determined that Gross should be held without bond because he is a flight risk.

"His risk of committing further fraud is also a concern," Hagy said.