2 Californians Charged With Operating Ponzi Scheme Investment Fraud

Kenneth Kenitzer, 66, of Pleasanton, California and Anthony Vassallo, 29, of Folsom, California, principals of Equity Investment Management and Trading, Inc., were accused by the SEC of running a $40 million Ponzi scheme. The SEC complaint alleges that Kenitzer (pictured here) and Vassallo solicited the funds from some 150 investors between 2004 to 2008, ostensibly to invest in the securities market. In fact, the complaint states that by September 2007, Kenitzer and Vassallo had "ceased trading on behalf of EIMT, withdrawn virtually all investor funds from EIMT's brokerage accounts and misappropriated the funds for their own use." Many of the victim investors were from the same Mormon community as Vassallo and Kenitzer, according to the complaint. Kenitzer and Vassallo had promised returns of as much as 3.5 percent per month (42 percent annually) with the use of their proprietary trading software program. The SEC action freezes the company's assets.

Read the story here, here and here.

Read the SEC complaint here.