A Federal judge in Chicago sentenced Daniel Spitzer, age 55, to 25 years in prison yesterday after the admitted head of an elaborate ponzi scheme pled guilty to 10 counts of mail fraud last summer. As part of the deal, he was also ordered to pay $33.98 million in restitution to the scheme's nearly 300 victims, mostly retirees. Spitzer was the principal of Kenzie Financial Management and several related entities.
According to federal prosecutors, between 2001 and 2010, investors put more than $105 million in the Kenzie Funds which were private funds that supposedly invested in foreign currencies. In reality, less than a third of the capital actually went into the funds and the rest was used, in classic ponzi scheme fashion, to pay distributions to early investors and cover promotional expenses. It remains to be seen if there will be a clawback of those earlier distributions to more equitably compensate all investors who were damaged by the scheme.
If you feel you are or were invested in a Ponzi scheme and would like a free case evaluation, please contact the experienced securities fraud attorneys at Colling Gilbert Wright & Carter