A Chicago man who operated an investment trading pool allegedly fraudulently
obtained approximately $1.4 million and caused some 15 individual investors to
lose about $600,000, federal law enforcement officials announced today. The
defendant, Christopher Varlesi, was charged with six counts of mail and wire
fraud in an indictment returned yesterday by a federal grand jury. Varlesi
allegedly misappropriated a substantial portion of investor funds for his own
benefit, including misusing $99,750 in May 2010 to pay for a year’s rent for an
apartment in the Trump International Hotel and Tower in Chicago and to make
Ponzi-type payments to other investors.
Varlesi, 53, of Chicago, will be arraigned at a later date in U.S. District
Court. He was the sole proprietor of Gold Coast Futures & Forex, which
purported to buy and sell securities and commodities and operate a pool of
investor money for trading purposes but was not actually registered or licensed
to do so. The indictment seeks forfeiture of approximately $600,000.
The charges were announced by Patrick J. Fitzgerald, United States Attorney
for the Northern District of Illinois, and Robert D. Grant, Special Agent in
Charge of the Chicago Office of the Federal Bureau of Investigation. The
Illinois Securities Department assisted in the investigation, as did the
Commodity Futures Trading Commission, which filed a civil enforcement lawsuit
against Varlesi in March of this year.
According to the indictment, between July 2008 and January 2012, Varlesi made
false representations to clients about using their money to trade gold,
commodity futures, and foreign currency, the expected return on their
investments, and the security of their money. He fraudulently retained
investors’ funds and concealed the scheme by creating and distributing false
account statements and making Ponzi-type payments to investors, the charges
allege. Varlesi also allegedly told clients that their investments were
guaranteed to be profitable, with no risk of losing principal. As part of the
scheme, the charges allege that he provided promissory notes to certain
investors, falsely promising to return the entire principal amount of their
investment, as well as guaranteed interest ranging between five to 7.5 percent
per month.
The government is being represented by Assistant U.S. Attorney Sarah E.
Streicker.
Each count of wire and mail fraud carries a maximum penalty of 20 years in
prison and a $250,000 fine, and restitution is mandatory. The court may also
impose a fine totaling twice the loss to any victim or twice the gain to the
defendant, whichever is greater. If convicted, the court must impose a
reasonable sentence under federal sentencing statutes and the advisory United
States Sentencing Guidelines.
The investigation falls under the umbrella of the Financial Fraud Enforcement
Task Force, which includes representatives from a broad range of federal
agencies, regulatory authorities, inspectors general, and state and local law
enforcement who, working together, bring to bear a powerful array of criminal
and civil enforcement resources. The task force is working to improve efforts
across the federal executive branch and, with state and local partners, to
investigate and prosecute significant financial crimes, ensure just and
effective punishment for those who perpetrate financial crimes, combat
discrimination in the lending and financial markets, and recover proceeds for
victims of financial crimes. For more information on the task force, visit:
www.stopfraud.gov.
An indictment contains only charges and is not evidence of guilt. The
defendant is presumed innocent and is entitled to a fair trial at which the
government has the burden of proving guilt beyond a reasonable doubt.
No comments:
Post a Comment