Alfred Gerebizza, formerly of the Chicago area, was recently added as a defendant in an indictment involving an alleged $105 million Ponzi scheme that authorities say defrauded 400 victims over a period of six years.
According to the latest indictment, Gerebizza and co-defendant, Daniel Spitzer, offered and sold $105 million worth of membership and limited partnership interests in "Kenzie Funds," which were purportedly operated by Kenzie Financial Management, located in the U.S. Virgin Islands.
Investors were allegedly told that their investments in the Funds would be used primarily to invest in foreign currency markets. Gerebizza and Spitzer are accused of falsely stating that the Funds had historic annual returns of 4.52 to 13.54 percent. (Actual bank records reflected less than 1 percent total net returns over five years.) The defendants allegedly also misrepresented the total value of the Funds.
Gerebizza and Spitzer are both accused of misappropriating investor money for their personal purposes, and misusing $71 million of investor funds to make Ponzi payments to other investors. Investor losses allegedly total approximately $34 million.
Gerebizza pled not guilty on Oct. 26 to 10 counts of mail fraud and six counts of filing falsified tax returns. He remains in custody at this time. Spitzer, who has been released on bond, also pled not guilty to 10 counts of mail fraud. Both men are scheduled to appear in court before U.S. District Judge James Zagel on Dec. 6.