The purported victim in a $100 million criminal fraud case now pending in federal court here is actually a convicted con man who has worked for the FBI since 2002 in undercover investigations around the country, according to court documents filed in four different states.

Norman Michael "Mike" Miller of Frisco, Texas, is "confidential source No. 1" in the criminal case brought in 2006 by federal agents here against businessman Syed Qadri and a group of associates who operated a Downtown Honolulu investment management firm called Amasse Capital, according to recently filed records in the case.

Now, Qadri's lawyer, Eric Seitz, has filed a motion to suppress evidence seized in the case, saying it was "manufactured by an inherently unreliable confidential informant."

Other than Miller, "not a single investor has complained about the business plans or actions of Mr. Qadri or the other defendants in this case," Seitz said in the motion, filed last week.

"The lack of complaints is presumably why the government has been unable to obtain a superseding indictment although the government has insisted that it would be filing such an indictment since June 2006," Seitz's motion said.

The prosecutor in the case, Assistant U.S. Attorney Chris Thomas, declined to comment on Seitz's motion or on Miller's role in the investigation.

Qadri, his wife, Patricia Roszkowski, and associates Jeffrey Greenhut and Ruben Carrillo Gonzales were indicted on four counts of wire fraud. All have pleaded not guilty.

Attempts to obtain comment from Miller, via telephone and e-mail messages left at a company he now operates in Texas were unsuccessful.

Local FBI spokesman Brandon Simpson declined comment.

But court records show Miller began working for the FBI as a "cooperating witness" in 2002 after admitting to federal authorities in South Carolina that he had defrauded more than a dozen investors of $17.5 million. He was also convicted of securities fraud and theft in Texas in 1991. Three months ago, a federal judge in Texas ruled that Miller must pay $9 million to investors caught up in a "rampant fraud" perpetrated by Miller in Texas and Arizona in the late 1990s.

POSSIBLE SCHEME

Miller is identified as the principal prosecution witness in the Qadri indictment returned by a federal grand jury here in 2006. According to the indictment, Qadri and his co-defendants tried to induce Miller to invest $100 million in a fraudulent "Ponzi scheme" they were operating out of a Bishop Street suite of offices.

Using search warrants based largely on information supplied by Miller, FBI agents and other federal law enforcement personnel searched the offices and homes of Qadri and his associates in September 2006, seizing $2 million in cash as well as valuable artwork, jewelry and a fleet of 19 expensive automobiles that included Lamborghinis and Ferraris.

The Qadri case indictment said Miller was told his investment of $100 million "would receive annual returns of 60 percent" and possibly as much as "100 to 400 percent monthly returns."

The government alleged that such promises were classic indications of a "Ponzi scheme," in which promised high rates of return on investments are paid with money received from new investors rather than with revenues from legitimate business transactions. When new investors can't be found, the schemes collapse.

Miller operated such schemes in both South Carolina and Texas, court records show.

Miller has not repaid any of the $17.5 million owed to his victims in the South Carolina case. In Texas, he has been fighting a long-running court battle to avoid paying a $9 million judgment held by two of his creditors, Neil and Sharon Lewis, said Barbara Emerson, attorney for the Lewises.

In the latest Texas court judgment, U.S. District Judge Richard A. Schell ruled March 21 in favor of the Lewises, saying the debt was "the product of fraudulent activities perpetrated by Miller."

Schell called the case "merely a chapter in the prolific career of chicanery authored by Miller."

Schell noted that Miller did pay $3 million to the Lewises but said that the money actually came from the South Carolina fraud.

"The source of the $3 million, however, comes from the proceeds of another pernicious scam cooked up by Miller in South Carolina," the judge ruled.

Miller is now appealing Schell's ruling to the U.S. Court of Appeals, said attorney Emerson.

'HE'S A CON ARTIST'

Miller's activities had terrible personal consequences for her clients, Emerson said.

"Neil Lewis is an elderly gentleman whose life was absolutely destroyed by Miller," the lawyer said. "Miller led him into the minefield and left him there."

The Lewises, reached at their home in California, said they had no idea Miller had assisted the FBI in a Hawai'i criminal investigation.

"He's a con artist and he should be put away in prison," Neil Lewis said.

Sharon Lewis said Miller "is living in a beautiful house on a golf course in a gated community" but claims "he has no money, no assets."

Miller's work with the FBI "irks me to death because he's hurt so many people," she said.

"I guess I can appreciate the fact that he knows a fraud when he sees it, but I still think he should be in prison," she said.

In the South Carolina case, Miller was originally sentenced in 2003 to 28 months in prison — a lighter-than-normal sentence that recognized assistance he had already given to the FBI, according to papers filed by the U.S. Attorney's office there.

Before beginning his prison term, Miller's sentence was reduced to probation at the request of prosecutors.

In 2002-2003, Miller "played an active undercover role" in an FBI fraud investigation called "Operation Sweet Tea Masquerade," U.S. Attorney Jonathan Gasser said in a 2005 memo to the court.

Miller later agreed to work undercover in a "terrorism investigation, which would bring him into jeopardy of physical harm" Gasser wrote.

That investigation, which targeted "militia groups," was later called off, but Miller then worked undercover in another fraud case called "Magnolia Madness," the government memo said.

Miller worked on that case from both Texas and South Carolina, keeping "meticulous records" and "preparing false documents," Gasser's memo said.

"Miller prepares documents that are superior to any I have seen by law enforcement," the memo said.

"These documents, such as bank statements, net worth statements, stock portfolios, passports, etc., are crucial to the success of an undercover operation of this nature," Gasser wrote.

CLOSE ASSOCIATION

He said he and FBI Special Agent Paul Jacobs had spent several hundred hours working with Miller and both were convinced that he had been "totally honest with us" and was "no longer involved in criminal activity," the memo said.

"Miller is the most industrious and effective informant that either of us have ever worked with," Gasser wrote.

Dated Oct. 24, 2005, the memo said Miller had been compensated for expenses but "he has not been compensated at all for his time."

According to records filed in the Qadri case, that changed in December 2006, when the government began paying Miller $1,500 monthly for "cooperative witness service."

The government paid Miller a total of $62,464 in expenses and monthly fees from March 2003 through January 2007, the records show.

A hearing on Seitz's suppression motion is scheduled for July 9 before U.S. District Judge Helen Gillmor.

A planned auction by federal authorities of the assets seized by the government from the defendants in the case hasn't taken place yet, said Seitz.

"We tried to stop it, but we lost. We've warned the government that if they go ahead, they might end up having to get it all back for my clients," he said.

Just the vehicles to be auctioned include three Lamborghini Murcielagos, two Ferraris (an F1 Spider and a Testarossa), a 2006 Rolls-Royce and seven Mercedes Benz C230s.