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Churchgoers victimized in $3.8M Ponzi scheme


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  • | 12:36 p.m. May 22, 2014
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  • Manatee-Sarasota
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SARASOTA — A federal grand jury indicted Sarasota financial adviser Gaeton Della Penna with multiple fraud counts in what authorities say is a $3.8 million Ponzi scheme where many victims met the defendant at church.

Della Penna, 65, was charged with eight counts of wire fraud and 10 counts of mail fraud, according to a release from the U.S. Attorney's office in Tampa. The Securities and Exchange Commission also charged Della Penna, known as Guy, with civil fraud, adding in a separate statement that he allegedly squandered his victim's “money on bad investments and personal expenses.”

Authorities contend Della Penna, identifying himself a distinguished trader and profit-maker, raised the $3.8 million from investors from 2008 to 2013 in three private investment funds he operated. Investors were told their funds would be used to trade securities or invest in small companies, according to the SEC. Many of the investors, the SEC adds, were acquaintances Della Penna met through his church. Della Penna initially promised 5% annual returns along with 80% of the trading profits, prosecutors say. He later allegedly promised some investors 10% returns on investments in small companies.

But prosecutors say Della Penna lost nearly all the money by making unsuccessful investments and diverting more than $1.1 million dollars for his girlfriend and mortgage payments on a 10,000-square-foot house. Then, in an effort to cover up the alleged fraud, the SEC says Della Penna launched a Ponzi scheme by using money from newer investors to pay fake returns to prior investors.

“Della Penna lied to investors about his trading track record in order to gain their trust and pocket their investments,” says Eric Bustillo, director of the SEC's Miami Regional Office, in the statement. “He fostered a false sense of security by creating bogus account statements showing positive returns when, in reality, he was operating a Ponzi scheme and stealing investor money.”
Della Penna surrendered to authorities yesterday, according to the statement from the U.S. Attorney's office. He faces a maximum penalty of 10 years in federal prison on each fraud count. The SEC and the U.S. Attorney's office also plan to go after the $3.8 million in alleged ill-gotten gains, according to the statements.

 

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