VI Money Manager Accused of Investment Fraud in Ponzi Scheme
The Securities and Exchange Commission (SEC) announced that
investment fraud charges have been filed in a Chicago federal court against a Virgin Islands
money manger. The charges were brought against Daniel Spitzer for his
alleged connection to a
Ponzi scheme of approximately $105.6 million.
The complaint claims that Daniel Spitzer involved nearly 400 investors in his investment scam. He told investors that their money would be primarily used to invest in foreign currency. According to the SEC, of the $105.6 million collected from investors, nearly $72 million was used to repay previous investors. Spitzer supposedly used less than one-third of the capital for investments.
The SEC alleges that Spitzer used the money to enjoy an “extravagant lifestyle” and to cover expenses associated with running his business. In addition, the SEC cites that he used approximately $900,000 to pay for expenses he incurred at a Las Vegas casino from March 2006 through October 2009.
“Daniel Spitzer ran an elaborate Ponzi scheme that he disguised by moving investor money through a complex network of foreign bank and brokerage accounts,” said Merri Jo Gillete, the director of Chicago’s SEC regional office. “He deceived investors into believing that he was using a sophisticated investment strategy that didn’t really exist.”
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