Another Ponzi schemer sentenced, this time out of nearby Fox Lake:

FAR NORTH SUBURBAN MAN SENTENCED TO 4 ½ YEARS WITH CHEATING TWO DOZEN INVESTORS OF $3.7 MILLION IN ALLEGED PONZI-SCHEME

CHICAGO – A far north suburban man was sentenced yesterday to 54 months in custody for engaging in a ponzi-type fraud scheme, cheating more than two dozen victims of approximately $3.3 million dollars they invested with a trading firm he owned.

The defendant, Joseph A. Dawson, pled guilty last November to three counts of wire fraud after he was charged by information in August, 2010.

The sentence was 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.

Dawson misappropriated more than $1 million of investors’ funds for his own benefit and used investors’ funds to pay promised returns to other investors.

Dawson, 49, of Fox Lake, was sentenced yesterday by Judge William J. Hibbler in U.S. District Court in Chicago, and ordered to forfeit approximately $3.3 million, representing the loss to investors. Judge Hibbler ordered Dawson to begin serving his sentence June 15, 2011.

Dawson was a commodity futures and securities trader who owned an investment fund called the LEAP Fund since about 2001. He also owned Dawson Trading LLC, which operated in Ingleside, Fox Lake and later Lakemoor, and which took over the business and customers of the LEAP Fund in about 2004.

Between 2004 and September 2009, Dawson offered and sold to 26 investors approximately $3.7 million of guaranteed investments in Dawson Trading.

These investors included former customers of the LEAP Fund. These investments were primarily in the form of promissory notes, which guaranteed the safety of the invested funds and promised to pay a fixed annual return plus as much as 80 percent of any trading profits.

Dawson misrepresented the profitability, safety and use of the funds raised from investors, as well as the status of the investments.

Instead of investing the funds as promised, Dawson used a significant portion for such personal expenses as his residence, the construction of a swimming pool, landscaping and three automobiles.

To conceal the fraud to investors, he lied about the status of their accounts, in part by creating and distributing fraudulently inflated periodic account statements.

The government was represented by Assistant U.S. Attorney Felicia Manno Alesia.