The people cheated out of $3.3 million won’t get their money back, by Judge George Lindberg, who got his start in politics in Crystal Lake in 1966 when he was elected state representative, sentenced Steven R. Green of Winnetka to six and a half years in prison. The U.S. Attorney’s press release follows:
NORTH SUBURBAN MAN SENTENCED TO 78 MONTHS IN FEDERAL
PRISON FOR INVESTMENT FRAUDS TOTALING MORE THAN $3.3 MILLION
CHICAGO — A north suburban man was sentenced today to 6½ years in federal prison for cheating victims out of more than $3.3 million dollars they invested in purported business opportunities with an investment banking firm that he owned and operated.
The defendant, Steven R. Green, pleaded guilty last December to one count of wire fraud for making fraudulent misrepresentations to investors and using the money he obtained from the investors to pay for business and personal expenses.
U.S. District Judge George Lindberg imposed the 78-month prison term, announced 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.
Green, 51, of Winnetka, was also ordered to pay restitution totaling $3,345,400 and to forfeit $1.98 million and a 2004 Range Rover. He was an owner and managing senior partner of Blackwater Capital Group, Inc., which he operated from his residence, and which recruited institutional investors and placed a capital into its client companies. Green was ordered to begin serving his sentence on Oct. 26.
In pleading guilty, Green admitted that between December 2007 and August 2008, based on his misrepresentations, 21 individual clients of Garden State Securities, a New Jersey brokerage and financial planning firm, agreed to invest a total of $1.98 million in Blackwater Capital client U.S. Drillers, Inc.
The capital placement contract provided that Garden State investors’ money would be placed in an escrow account, which would be controlled by a third party, before being invested with U.S. Drillers.
Instead of directing the investors’ money into the escrow account, however, Green kept the funds in bank accounts that he controlled and used the money for his own benefit, including for paying such business and personal expenses as restaurant tabs, travel, and purchasing the 2004 Range Rover.
In addition, Green admitted that between October 2008 and February 2009, he fraudulently obtained $250,000 from an additional victim who agreed to purchase shares of Blackwater Capital.
Green, instead of using the money to operate the business, used the money for himself.
Green also admitted that in 2007 he fraudulently obtained $1,115,400 from 14 investors who thought they were participating in a reverse takeover by a Blackwater Capital client, OPE Holdings, of Venpath Investments, Inc., a publicly traded shell company.
The chief executive of OPE reimbursed the victims for their losses, thus sustaining the entire loss individually.
The government was represented by Assistant U.S. Attorney Erika Csicsila.