Sunday, February 7, 2010

California Man Arrested For Running $12 Million Ponzi Scheme

Peter Jerald Frommer, 34, formerly of Malibu, California, was arrested Friday for allegedly running a Ponzi-type investment fraud scheme that bilked investors out of $12 million. Specifically, Frommer was indicted on two counts of mail fraud, seven counts of wire fraud, five counts of money laundering and three counts of of failing to file federal income tax returns for the years 2004 - 2006. Prosecutors alleged that Frommer, through a bogus investment scheme known as "Cap Exchange" or “Cap X”, purported to trade in surplus property of defunct companies and promised investors “guaranteed” returns of 8 to 15 percent within six weeks. Instead of purchasing the assets as promised, Frommer reportedly used the investment funds to maintain a lavish lifestyle and pay earlier investors. He faces as many as 233 years behind bars if convicted.

Read the story here, here, here and here.

1 comment:

Anonymous said...

Frommer got sentenced to 108 months in prison on 4/11/2011. He almost immediately appealed his sentencing on the grounds that the judge went above even the recommended guidelines after hearing the many witness statements.
He began serving his sentence on 6/14/2011 at Taft Correctional Institution in California.