Calif. Man Charged with $40 million Ponzi scheme

AP ^ | March 20, 2009 | Don Thompson

[Colofornian]

SACRAMENTO—Federal prosecutors unsealed a complaint Friday charging the president of a suburban Sacramento company with running a $40 million investment scam that bilked about 150 investors, many of whom he met through his Mormon church.

One of his associates was charged with impersonating a federal agent in what prosecutors say was a bizarre shakedown scheme to recover some of the lost money.

Acting U.S. Attorney Lawrence Brown said Anthony Vassallo, 29, of Folsom, promised investors in his hedge fund 36 percent annual returns with little risk of loss. But he put their money into high-risk ventures, as well as luxuries like a $103,000 Lexus for his wife.

Most of the money was gone by September 2007. So, investigators say, he stopped trading securities and started making up investment information that reported continued profits.

He also paid off some investors using other investors' money, said Internal Revenue Service agent Scott O'Briant.

"You rob from Peter to pay Paul. Eventually you run out of Peters and Pauls," O'Briant said.

That's when the alleged Ponzi scheme collapsed like many others in the faltering national economy.

The federal Securities and Exchange Commission shut down Vassallo's Equity Investment Management and Trading Inc. last week. It froze $1.2 million found in one of Vassallo's bank accounts.

Vassallo turned himself in and was ordered detained during a federal court appearance in Sacramento on Friday. He faces up to 20 years on fraud and money laundering charges and up to 10 years for securities law violations

[hunter112]

Like they say, when the tide goes out, you can tell who wasn’t wearing a swimsuit...

[SERKIT]

What's the difference between a Ponzi Scheme and the Porkulus Package? (No answer required, it's rhetorical....)

[Colofornian]

What's the difference between a Ponzi Scheme and the Porkulus Package?

I went from a :) on your comment to a :( when I realized how true it was.

[livius]

Affinity fraud. Madoff picked mostly Jewish organizations and individuals because he was Jewish and had an in, and this guy picked mostly Mormons because he was Mormon. Fraudsters are completely amoral sociopaths. They use everyone and everything around them to achieve their completely selfish goals.

[Utah Binger]

All I can say is: P.T. Barnum Goes to Priesthood Meeting

[staytrue]

Like they say, when the tide goes out, you can tell who wasn’t wearing a swimsuit...

or "There is always more than one roach"

[Libloather]

What's with all the suckers lately? (And yes, I throw Hussein voters in there...)

Closings In Miami Man's Ponzi Scheme Trial

Albemarle. man accused in Ponzi scheme awaits bond hearing

[SeaHawkFan]

So much for those honest Mormons we are always hearing about. As a group, Mormons are not all that honest in their business dealings; and I speak from experience. Only attorneys are worse.

[aMorePerfectUnion]

In my experience in the field of finance, most pyramid schemes and get rich schemes have a Utah address.

[elpadre]

Last week there was a short story that IRS was giving Madoff’s victims some type of preferential treatment. I believe it was a tax credit for all or most of their declared loss.

I wonder if all ponzi scheme victims will get the same benefit??

If not, why not??

[Liz]

What's with all the suckers lately? (And yes, I throw Hussein voters in there...)

Bobama's Ponzi has the "backing" of the federal gov't (/snic).

[reaganaut]

I am not really surprised. There was a book out several years ago called “The Darker Side of Virtue” that examines how LDS CULTURE feeds this kind of activity.

It is a hard book to find anymore, but a great read. Even talks about some scams GA’s were involved in.

[Colofornian]

There was a book out several years ago called “The Darker Side of Virtue” that examines how LDS CULTURE feeds this kind of activity.

Well, spiritual fraud (Joseph Smith) and financial fraud (Joseph Smith's Kirtland Bank, etc.) begets generational fraud.

[Utah Binger]

I would swear that I heard crickets chirping on this thread.

[SkyPilot]

But he put their money into high-risk ventures, as well as luxuries like a $103,000 Lexus for his wife.

Another liar, thief, and charlatan married to a woman with very expensive "maintenance."

It would be too low to call her a high price prostitute.....sort of.

[SkyPilot]

Affinity fraud. Madoff picked mostly Jewish organizations and individuals because he was Jewish and had an in, and this guy picked mostly Mormons because he was Mormon. Fraudsters are completely amoral sociopaths. They use everyone and everything around them to achieve their completely selfish goals.

That is exactly what came to my mind.

[reaganaut]

Would that be Mormon Crickets?

[Utah Binger]

No, the Mormon Crickets talk very loud and boastful with voice starting very low and growing to crescendo with a resounding testimony at the end. The crickets here are totally silent. They are the castrati crickets.

[reaganaut]

Ahhh...Thank you, I was unaware of the personality of them. lol.