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Ponzi schemer gets 25 years in jail for US$105m fraud
[CHICAGO] An Illinois man was sentenced to 25 years in prison for running what prosecutors said was a US$105 million (S$142 million) Ponzi scheme, bilking about 280 investors including his brother- in-law.
Daniel Spitzer, who had homes in Barrington, Illinois, and on the Caribbean island of St. Thomas, collected money from investors by lying about likely returns and then used the funds to repay other clients.
"I am deeply sorry for everything I have done," Spitzer told US District Judge James Zagel in Chicago on Thursday. "I will never stop taking responsibility or assisting in any way I can to make things right."
Spitzer managed the Kenzie funds, which lost US$34 million from 2004 to August 2010, when he was arrested. He pleaded guilty to 10 fraud counts on the day his trial was to start in July. He didn't have a plea deal with the government.
Spitzer was jailed on Wednesday after his lawyers told Zagel that their client reported a day earlier that as much as US$1 million was held on the the island of St. Vincent. The judge gave the parties a day to investigate and ordered Spitzer detained. At sentencing, Zagel said the funds would be used as part of almost US$34 million in restitution the judge ordered.
Judge Zagel mostly rejected defence claims that Spitzer had invested about 28 per cent of his clients' money and that some of the losses came during the economic downturn that began in 2007. He was skeptical about Spitzer's apology and imposed a sentence almost as long as the 27 years sought by prosecutors.
"The damage was very severe," Judge Zagel said.
Judge Zagel said Spitzer deceived himself if he believed his investment strategy would work out, as defense lawyers claimed.
"This is an extended act of greed that went on and on and on," Assistant US Attorney Madeleine Murphy told Zagel.
Defence attorney Molly Armour said Spitzer was truly apologetic and wanted to help his victims recover their losses.
A co-defendant, Alfred Gerebizza, was found guilty of 16 counts at the July trial. He refused to attend his trial. He has yet to be sentenced.