Friday, January 29, 2010

Chicago Man Pleads Guilty In $6 Million Ponzi Scheme Case

David J. Hernandez, 49, of Chicago, Illinois, plead guilty yesterday to one count of mail fraud in connection with a Ponzi-type investment fraud scheme he ran that bilked about 250 investors out of some $6.8 million. Hernandez, a partner in in a Chicago web radio sports show (ChicagoSports Webio.com), also ran a purported investment firm, NextStep Financial Services, Inc., and promised investors returns of as much as 16 percent every thirty days for "risk free" "guaranteed investment contracts" managed by Hernandez. However, there were, in fact, no investments at all. When the fraud scheme collapsed last June, Hernandez fled Chicago, but was captured and arrested in Normal, Illinois, after reportedly attempting suicide. Hernandez' scheme ram from at least February 2008 until June 2009. His wife, Gina M. Hernandez, was also named in the original SEC complaint. He and his wife reportedly spent the investment funds on a lavish lifestyle. According to reports, Hernandez is a convicted felon who has filed bankruptcy three times. He was indicted in 1997 and plead guilty to one felony count of wire fraud for misappropriating nearly $600,000 in investor funds from Columbia National Bank in Chicago.

Read the story here , here and here.

Read the original SEC complaint here.

3 comments:

Dale Yeager said...

Dale Yeager a nationally known criminal analyst says that news coverage of the recent investor scandals is missing a critical aspect of these crimes. This overlooked issue is something Yeager calls the “Due Diligence Mess.”

Yeager, says the problem is the antiquated way due diligence is performed for investors.

“The financial crimes of the past year will continue to occur unless radical changes are made in the due diligence process,” states Yeager. “Due diligence must be performed as a criminal investigation not just a financial assessment.”

Based on his experience performing over 200 financial investigations, he believes that the focus must be on the ethics of the people operating the organization the investor will be placing their money into.

“Due diligence is about assessing a person’s credibility” states Yeager, “and people assessment has and always will be the domain of forensic psychology. Look at the amount of negative information that reporters have discovered about Madoff over the past few months. Information that provides a specific psychological profile of him, showing a lifelong pattern of narcissistic and unethical behavior.”

Yeager lays out a plan of action to prevent investor fraud with his article, “The Due Diligence Mess: 3 Reasons Why Ponzi Schemes and Investor Fraud Will Continue”.

“People have become accustom to using forensic accountants,” states Yeager. “But they need to become accustom to using that process in accessing behavior and personal ethics.

Anonymous said...

More info on the Ponzi scam of Craig Gutowsky and Kevin Carney.
Kevin G Carney resides at 1072 Cypress Lane, Elk
Grove Village, Illinois 60007.
847-949-9933

Individual Inmate Report

Jail I.D. # Inmate Full Name Date of Birth
2010-0409065 CARNEY, KEVIN 05/21/1961
Booked Date Housing Location Visiting Day / Time Bail Amount
04/09/2010 15-KK Call for Visit Info 500,000
Next Court Date Court House Location
06/24/2010 Criminal C
2600 South California Avenue
Chicago, Illinois 60608

Craig Gutowsky 847 489 2702
Craig Gutowsky resides at 19 S. Mont Clair Court, Cary Illinois 60013
6/2/2010 11:27:42 AM
Arrested for 7 Felonies January, 15, 2010 Du page County, Illinois
Case Details
Case Number 2010CF000225 Must Appear *
You have to appear in court on the next court date. Next Court Date 06-30-2010
File Date 01-28-2010 Next Court Location COURTROOM 4010
Case Title PEOPLE OF THE STATE OF ILLINOIS -VS- CRAIG GUTOWSKY Next Court Time 09:00 AM
Agency Office of the Attorney Ge Assigned Location
Legal Status ACTIVE Balance Due Amount
Counts Count Number Count Description Count Status Complaint Number
0001 THEFT-UNAUTHORIZED CONTROL KNOWING TO DEPRIVE - $100,000 < $500,000 ACTIVE 10225
0002 THEFT BY DECEPTION WITH INTENT TO DEPRIVE - $100,000 <= $500,000 ACTIVE 10225
0003 SECURITIES VIOLATION - INVESTMENT ADVISOR FRAUD ACTIVE 10225
0004 SECURITIES VIOLATION - INVESTMENT ADVISOR FRAUD ACTIVE 10225
0005 SECURITIES VIOLATION - INVESTMENT ADVISOR FRAUD ACTIVE 10225
0006 SECURITIES VIOLATION - INVESTMENT ADVISOR FRAUD ACTIVE 10225
0007 SECURITIES VIOLATION - INVESTMENT ADVISOR FRAUD ACTIVE 10225

Howard Steinberg Esq. said...

Craig Gutowsky 44 of 19 S. Mt Clair Court Cary, Illinois was charged in a Illinois Ponzi Scheme.
The Arrest of Craig Gutowsky Cary, Illinois has shocked his bedroom community of Cary, Illinois.
PEOPLE OF THE STATE OF ILLINOIS -VS- Craig Gutowsky
Case Number 2010CF000225
Craig M Gutowsky was charged with 7 felonies by a Du Page County grand jury in January 2010 involving
THEFT BY DECEPTION WITH INTENT TO DEPRIVE – $100,000 -$500,000
and SECURITIES VIOLATION .
Renee Gutowsky was not yet charged in this Illinois Ponzi .Craig Gutowsky is out on $150,000 bond and is working selling cars at Elite Motors
822 N. Lake St.Mundelein IL, 60060 and can be reached for comment at 847-949-9933.
Phillip J Abbinanti & Judith M Abbinanti
390 Town Place Circle Bufallo Grove illinois paid the $15000. dollars bail for Craig Gutowsky to be released from the Du Page County Illinois jail in January 2010 Why shouldn't they ? Gutowsky is married to their daughter. Craig M Gutowsky was charged with 7 felonies by a Du Page County Illinois grand jury and is out awaiting trial.