An Orange County man who claimed he wanted to revive production of America's first motorcycle has been convicted of bilking investors in his Indian Motocycle scheme out of $830,000.
A U.S. District Court jury deliberated for less than three hours Monday before finding Philip S. Zanghi II guilty of 12 counts of securities fraud, three counts of tax evasion and six counts of money laundering.
Judge Frank Freedman scheduled sentencing for Zanghi, 51, of Mission Viejo, for Dec. 9. The maximum penalties he faces total 221 years in prison and $14.5 million in fines.
Zanghi, who acted as his own lawyer, maintained he was serious in his attempts to revive Indian, which built motorcycles from 1901 until 1954.
"Maybe I'm a con man," Zanghi told the jury in his closing arguments. "Maybe I'm a promoter. But I brought the Indian trademark back."
Government prosecutors said that he did little else.
A colorful promoter, Zanghi once spent a year in an Italian prison awaiting extradition to face grand theft charges in a California real estate deal--charges of which he later was acquitted.
When he started promoting the idea of resurrecting Indian in 1990, he told investors he wanted to build the big bikes in Springfield, where the original Indians were built. When that fell through, he said he would open a Connecticut plant.
In actuality, government prosecutors showed, he did little but license T-shirts.
They said he used the proceeds from stock sales and licensing agreements to finance a luxurious lifestyle with a Rolls-Royce and a Ferrari, furs, Rolex watches and international travel.
Zanghi's companies ended up in U.S. Bankruptcy Court, along with several other ventures to revive the famed motorcycle.
Engineer Oscar Hedstrom and high-wheel bicycle racing champion George Hendee launched America's love affair with two-wheeled power in Springfield with their "motocycle" in 1901.
Within a few years, their teepee-shaped Springfield plant was the largest motorcycle maker in the world. And their big bikes, which are still prized by collectors, gave birth to the motorcycle subculture in the U.S.
Of the dozens of American motorcycle companies that followed Indian, only archrival Harley-Davidson Inc. of Milwaukee survives.