Couple convicted of $5 million in software scams they promised they’d take on Microsoft — but were actually ‘a junk pile’, according to an employee

It’ll be bigger than Microsoft, we swear.

For more than 15 years, Michael and Betsy Feinberg have promised investors that the revolutionary computer program, VDelta, was on the verge of taking on giants including Microsoft MSFT,
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and Sun Microsystems, prosecutors say. They only needed a few hundred thousand dollars to cross the line.

Prosecutors said the Feinberg family managed to deceive hundreds of investors out of nearly $5 million, resulting in the same deception being repeated over and over between 1997 and 2013. Meanwhile, employees working for VDelta said the technology was little more than a “stack from scrap”,

A jury convicted Michael Feinberg, 73, and Betsy Feinberg, 80, of conspiracy to commit securities fraud, conspiracy to commit wire fraud and securities fraud. They are due to be sentenced in June.

The letter left with Michael Feinberg’s attorney was not immediately returned and Betsy Feinberg’s attorney had no comment.

Husband and wife, both from Tucson, Arizona, built their scam around their business, Catharon Software Corp. that they claimed had produced cutting edge software that would provide instant and substantial returns to investors.

Instead, the couple seized whatever money they could get hold of, to use for personal expenses, such as paying off the mortgage, the plaintiffs said. The Feinbergs met several victims through community groups around Sedona, Ariz. , where they lived a lot of fraud.

Every few years, the Feinbergs would come back in search of new tags, telling the same story – their program was complete but they just needed some extra money to bring it to market. Investors can expect returns of up to 2,000% coming soon after.

“The software product, VDelta, is finished, not in research and development; court documents quoted the couple as saying in promotions: “VDelta’s performance lives up to expectations and will enable VDelta Catharon to compete with Microsoft.”

But the truth is that the program was not perfect and did not work. Prosecutors said it didn’t work out when Feinbergs sought investors in 1997, 1999, 2000, 2002, 2003, 2008, 2010 and 2013.

One employee told the investigators that the software had “no basis for serving as usable software,” but that once they “get money from an investor, they’ll keep trying to get more money out of them.” The same employee described VDelta as little more than a “heap of junk”.