Daniel Spitzer Ponzi Scheme Busted


June 30, 2010 – Daniel Spitzer allegedly operated several business entities as a foreign currency investment fraud, which raised over $105 million from 400 investors. This week, the Securities and Exchange Commission (“SEC”) filed a complaint that claims Spitzer misled investors from at least 2004 until as recently as March 2010. Spitzer, a resident of St. Thomas, recruited investors from all over the United States.

According to the complaint, Spitzer and his sales team told investors that their money would be placed in investment funds that would, in turn, primarily be invested in foreign currency. Spitzer allegedly enticed new clients by claiming he was an extremely successful fund manager and always produced exorbitant annual returns, including one year of 180%. To facilitate his purported scheme, Spitzer allegedly issued phony documents, including false K-1s, to clients.

The SEC claims that, in reality, Spitzer only invested $30 million of client funds, including $16.5 million in a foreign entity that ultimately lost money and was liquidated back to Spitzer. Spitzer also apparently invested $16 million in money market funds but only earned a few thousand dollars.

Apparently, Spitzer used a majority of client funds to make Ponzi payments to other investors. The complaint further alleges that Spitzer used $15 million to pay business expenses including lavish salaries for himself and his sales team. The SEC claims that he also paid $4.8 million for third-party business expenses and personally spent more than $900,000 at a Las Vegas Casino.

The US District Court for the Northern District of Illinois issued an order freezing all of Spitzer’s assets and those of his companies. The SEC is seeking permanent injunctions barring Spitzer from committing further securities law violations. They are also seeking disgorgement, prejudgment interest, and civil penalties against Spitzer and at least five of his entities.

Source: SEC

If you invested with Daniel Spitzer, or are the victim of some other type of investment fraud, the Law Offices of the attorney, and its affiliates, is prepared to review your situation and potential claim(s) without charge, and will consider representing you on a contingent fee basis, which means that you will not have to pay out of pocket for your legal representation. The firm will take a fee only if we are successful in recovering your assets.
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