Honoré de Balzac once wrote, "Le secret des grandes fortunes sans cause apparente est un crimeoublié, parce qu' il a été proprement fait." which loosely translates as "The secret of great fortunes without apparent cause is a crime forgotten, for it was properly done." or as we have shortened it to "Behind every great fortune lies a great crime."
Americans -- always cutting to the chase. Daniel Spitzer, of Barrington, Illinois, tried the short cut - pulling off the great crime - but it didn't pan out for him because he has been charged with eight counts of mail fraud for allegedly stealing more than $105 million from hundreds of victims in an investment fraud scheme.
Federal prosecutors said that Spitzer, 51, sold memberships and limited partnership interest in 12 investment funds known as the “Kenzie Funds.”
Spitzer told about 400 investors that their money would be used in Forex trading. He also told them the Kenzie Funds had never lost money, and misrepresented the funds' return rates. While Spitzer told investors that profits ranged from 4.52 percent to 13.54 percent over a five-year period, prosecutors said bank accounts indicate the total net return on investments during that time was less than 1 percent.
In reality, federal authorities said that Spitzer only invested about one third of the $105 million raised from investors, which yielded a total net return of less than 1 percent. As of June 30, 2009, the Kenzie Funds only had about $4 million in bank accounts, though Spitzer had told investors it was worth about $250 million, according to the indictment.
Prosecutors alleged that Spitzer used a significant portion of the money given to him by investors in a Ponzi scheme to pay off earlier investors.
The charges followed a joint investigation by the U.S. Postal Inspection Service and the FBI.
Spitzer will be arraigned in the U.S. District Court. He faces up to 20 years in prison and $250,000 fine for each count of mail fraud. The government is also seeking $34 million in compensation from Spitzer. That total is comparable to the amount of loss to the alleged victims.
Daniel forgot the "...for it was properly done" part of his crime.
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