Former Portland developer Michael Liberty pleaded not guilty Thursday to charges that he defrauded investors of millions of dollars.

Liberty faces 10 counts in federal court in Portland, including wire fraud, securities fraud, making monetary transactions using money gained illegally and related conspiracy charges. Some of the charges carry penalties of up to 20 years in prison and call for forfeiture of as much as twice the amount allegedly gained unlawfully.

Liberty and a co-defendant, Paul Hess of Massachusetts, allegedly induced investors to put money into shell companies set up by Liberty that purportedly would then transfer the investments to Mozido, a company that Liberty founded in Texas to create software for people to do their banking on cellphones. However, many of the shell companies were actually barred from investing in Mozido, prosecutors said, and the investors’ money was used to finance Liberty’s lifestyle and pay commissions to Hess, who had told investors that he was not earning commissions.

Hess pleaded not guilty last week. He was freed on $50,000 unsecured bond. Liberty was freed on $500,000 bond and surrendered his passport to the court. The matter is scheduled to go to trial in February.

Liberty was a leading developer in Portland in the 1980s and was responsible for the Chandler’s Wharf condominiums and offices at 100 Middle St. Liberty, who grew up in Gray, now lives in Florida, although he still has property in Maine and conducted some of the business activities here.

Mozido attracted about $300 million in investments, but so far has not developed the software that would allow customers to handle most of their finances without a bank.

Last year, Liberty, Hess and others were charged by the Securities and Exchange Commission with defrauding investors with the alleged Mozido investments. That civil case isn’t expected to go to trial until mid-2020.

Edward D. Murphy can be contacted at 791-6465 or at:

emurphy@pressherald.com