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 original SEC complaint here.