Ponzi Guy Gets 6 Years

A press release from the U.S. Attorney’s Office:

Chicago Investment Fund Manager Sentenced to 72 Months in Federal Prison for Defrauding Investors of over $9 Million

CHICAGO — A Chicago investment manager who fraudulently obtained millions of dollars from investors in a sophisticated Ponzi scheme to fund his extravagant lifestyle was sentenced today to 72 months in federal prison.

The defendant, NEAL GOYAL, 34, of Chicago, who was the sole managing member and founder of Blue Horizon Asset Management, LLC, and Caldera Advisors, LLC, was also ordered to pay more than $9.2 million in restitution by U.S. District Judge Matthew F. Kennelly. Goyal, who pleaded guilty in February to one count of wire fraud, was ordered to surrender to begin serving his sentence on September 17, 2015.

Ponzi Logo“Goyal was running a Ponzi scheme and he stole much of his investors’ money to prop up his extravagant lifestyle,” Assistant U.S. Attorney Kenneth Yeadon argued in a government sentencing memorandum. “There is no justification for the crimes that Goyal committed other than his own desire to place his own self-interests in front of the interests of his investors.”

From 2006 to 2014, Goyal perpetrated the scheme by setting up a fake trading shop on Michigan Avenue in Chicago in order to fool his investors into believing that his trading strategy

generated market-beating returns. Goyal concealed his scheme by using existing investor money to repay investors, and by creating and distributing false account statements. Many of the duped investors were Goyal’s friends and family members.

The sentence was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, and Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation.  They commended the assistance of the U.S. Securities and Exchange Commission.


Comments

Ponzi Guy Gets 6 Years — 1 Comment

  1. Illinois Public sector pensions are also a ponzi scheme, with IMRF being in better condition than the rest (with the exception of a very few local police and fire pensions of which none may be in McHenry County) for various reasons.

    That’s because the legislative benefit hikes and salary hikes have created pension contributions unaffordable to taxpayers, and politicians made the situation worse by entirely skipping or shorting pension contributions.

    Why are Illinois public sector pensions a ponzi scheme?

    One way to understand is look at the unfunded liability.

    The unfunded liability is money that should be in the pension fund today, but is not, to pay pension benefits earned to date but not yet paid.

    So if all contributions stopped today, the money would run out before all the benefits earned could be paid.

    There are several other reasons, such as often overly optimistic “actuarial” assumptions, politicians in the past that have set contributions lower than actuarial contributions, etc.

    Once again IMRF has several unique characteristics that make
    it different.

    Illinois public sector pensions pose a risk to all taxpayers in Illinois, whereas the above Goyal ponzi scheme affected only Goyal investors.

Leave a Reply

Your email address will not be published. Required fields are marked *