The former chief executive of Chicago-based private-equity firm WexTrust Capital LLC was sentenced to more than 13 years in prison a year after pleading guilty last year to a fraud that cost investors $9.2 million. Get the full story »
Inside these posts: Ponzi
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Madoff trustee to distribute $2.6B to victims
The court-appointed trustee charged with recovering assets stolen by Ponzi schemer Bernard Madoff is ready to distribute $2.6 billion worth of recovered funds to the victims. This will be the first time that Madoff’s victims will receive recovered funds. Get the full story »
Ex-Chicago fund manager charged in $3.5M fraud
A former Chicago hedge fund manager accused of engaging swindling more than $3.5 million from approximately 48 victims who invested in funds he purported to operate, has turned himself in to federal authorities.
James Brandolino, 42, of Joliet and formerly of Chicago, was charged with mail fraud in a criminal complaint filed in U.S. District Court by U.S. Attorney Patrick Fitzgerald. Prosecutors said he obtained about $4.7 million from 48 high net worth investors since 2003 for purported managed futures trading accounts and a commodity pool investment. He provided about $1.1 million in investor redemptions and allegedly lost roughly half of the total invested funds through trading and misused most of the remaining funds for his own benefit, prosecutors said. Get the full story »
Downers Grove swindler gets 16 years in Ponzi scheme
David Hernandez’s lifetime of lying has caught up to him, said a federal judge who sentenced the Downers Grove man Friday to more than 16 years in prison for swindling more than 250 people out of $6.4 million.
Hernandez, best known for starting an Internet-based sports talk show with radio personality Mike North, apologized to his fraud victims in a rambling, tearful statement to U.S. District Judge Robert Gettleman. Hernandez pleaded for sympathy because he claims to suffer from mental illness brought on by childhood abuse. Get the full story »
Man who defrauded hundreds to be sentenced
A former Decatur man who pleaded guilty to stealing more than $15 million from about 300 people in central Illinois through a Ponzi scheme is scheduled for sentencing Friday in federal court in Peoria.
William Huber of La Jolla, Calif., pleaded guilty Aug. 10 to mail fraud, money laundering and other charges. The 61-year-old faces up to 50 years in prison and a maximum fine of $1 million. Get the full story »
Feds charge more than 500 in Ponzis, frauds
U.S. Attorney General Eric Holder announces the results of "Operation Broken Trust." (Chip Somodevilla/Getty)
U.S. officials said Monday they have charged more than 500 people in what they dubbed the largest-ever nationwide sweep of scam artists preying on individual investors.
The announcement comes as federal agencies and the Obama administration are facing pressure to punish big-name companies and individuals for their role in the financial mess. So far, the U.S. has won few high-profile cases, compared with the aftermath of the savings and loan crisis and the dot-com bust. Get the full story »
Three men charged in Islamic-based Ponzi scheme
Three owners of a Chicago-based real estate development firm have been charged with fraud for allegedly cheating investors out of $43 million while claiming to be compliant with Islamic law.
A federal grand jury returned a 14-count indictment against the owners of Sunrise Equities on Tuesday, U.S. Attorney Patrick Fitzgerald said in a Wednesday statement. Federal officials said Salman Ibrahim, the majority owner and president of the now-bankrupt firm, and Mohammad Akbar Zahid, senior vice president of investor relations and a 10-percent owner, told clients that their investments would comply with Shariah law.
Islamic law prohibits interest, so Ibrahim and Zahid told investors they would receive monthly pay-outs of profits from real estate development. According to Fitzgerald’s office, the men promised annual returns of between 15 and 30 percent. Get the full story »
U. of C. trustee named in Ponzi suit
From Crain’s Chicago Business | Hedge fund operator Steven Stevanovich, a University of Chicago trustee who once donated $7 million to the school, has been accused in a lawsuit of reaping at least $323 million in “false profits” by participating in a Ponzi scheme. Stevanovich’s attorney and a spokesman for the U. of C. did not immediately return calls. Get the full story>>
Ex-fund manager Bell gets 5 years in Ponzi case
Onetime Chicago hedge fund manager Gregory Bell was sentenced Thursday to five years in prison for his role in propping up the Tom Petters Ponzi scheme as it began to unravel more than two years ago. Get the full story »
Sep. 22, 2010 at 11:50 a.m.
Filed under: Banking, Investigations, Investing, Policy, Politics, Regulations SEC watchdog: Timing of Goldman case ’suspicious’
Goldman Sachs chairman and CEO Lloyd Blankfein at the Senate hearing on the role of investment banks during the financial crisis, Apr. 27, 2010. (Olivier Douliery/Abaca Press/MCT)
The timing of the Securities and Exchange Commission’s case against Goldman Sachs Group Inc. was “suspicious,” the federal regulator’s watchdog said Wednesday.
The SEC filed civil fraud charges against Goldman in mid-April, the same day the watchdog group released a damning report that accused the SEC of mishandling its probe of Allen Stanford’s alleged Ponzi scheme.
The report, authored by SEC Inspector General David Kotz, said the SEC had suspected as early as 1997 that Stanford was running a Ponzi scheme, but did nothing to stop it until late 2005. Get the full story »
Ill. man gets 23 years for $77M Ponzi scheme
Tearful, angry victims of a $77 million Ponzi scheme that targeted hundreds of often working-class Italian-Americans crowded into a Chicago courtroom Thursday to tell their stories before a judge handed the convicted swindler a maximum 23-year prison term.
The federal judge rejected prosecutors’ recommendation of a 12 1/2 year sentence for Frank Castaldi — in part because he had reported the two-decade scam himself — saying that would let the 57-year-old accountant and businessman off too easy, given the lives he ruined.
Suburban man sentenced in $28M Ponzi scheme
A judge has sentenced the owner of a suburban Chicago printer repair company to 10 years in federal prison in a $28 million Ponzi scheme.
In a Monday statement, the U.S. attorney’s office said Matthew Scott was also ordered to pay nearly $5 million in restitution. Prosecutors accused the owner of Northlake-based Gelsco of swindling around 75 people. Some lost their life savings.
Long Grove man pleads guilty in Ponzi scheme
From The Daily Herald | Francis Alan Schmitz, a 59-year-old man from Long Grove, has pleaded guilty to defrauding financial institutions in an alleged Ponzi scheme.
Govt. wants bond revoked for fraud mastermind
The government is asking a federal court judge to revoke the bond of accused investor David Hernandez, saying he attempted to delay his sentencing by fabricating a letter from a doctor that said he was starting treatment for cancer.
Hernandez pleaded guilty in January to a Ponzi-style scheme that bilked more than 200 people of their savings. The swindle allegedly garnered $6.3 million for Hernandez, which he used to bankroll a now-defunct Chicago sports-talk radio station and other personal purchases.
Federal prosecutors say Hernandez who lives in Downers Grove and is free on bond until a sentencing that could mean up to 14 years in prison — should be locked up because he is a flight risk. Get the full story »
Alleged bond scam financed cars, porn, and more
About 120 Illinois and California residents thought they were investing more than $20 million in Turkish Eurobonds when, in fact, a Lisle man and others were spending the money on luxury automobiles, homes, vacations and online pornography, the Illinois Department of Insurance alleged Tuesday.
The state’s action follows a lawsuit filed by the Securities and Exchange Commission in March in which the federal regulator said the group was using the investors’ money to also buy a stamp collection, and also invest in “the cryogenic preservation of umbilical cord stem cells.” Get the full story »
