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The Other Mr. Spitzer – Final Judgment Issued in Ponzi Scheme Case

December 13, 2010

Photo by Jamie Adams. Some rights reserved.

An SEC litigation release from December 10, 2010 disclosed details regarding a final judgment against one Daniel Spitzer, who allegedly operated several business entities in order to operate a fraudulent scheme beginning in 2004.  It seems that Mr. Spitzer raised over $105 million from investors by telling them he was a successful fund manager planning to invest their money in foreign currency.

Instead, Spitzer invested only $30 million, issuing false K-1s to his investors that indicated inflated returns.  The rest, deposited in bank accounts  in Anguilla and Puerto Rico, he used for third-party business expenses and what seem to be quite generous salaries for himself and his sales team.  The SEC also reports that he also “led an extravagant lifestyle and spent more than $900,000 at a Las Vegas casino.”

On December 6, a permanent injunction was issued against the eighteen entity defendants affiliated with Spitzer’s scheme; Spitzer himself must pay $33.9 million in damages, $9 million in prejudgment interest, and $150,000 in civil penalties.

Visit our site to read more about this and other SEC enforcement actions.

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