A Houston-based investment manager recently pleaded guilty to investment fraud in Utah. Authorities say that the man created an investment company called Winsome Investment Trust and acted as its sole manager, attorney and trustee.
Prosecutors allege that the man recruited investors by misrepresenting the assets that Winsome had and also misrepresented Winsome’s asset allocation.
The false statements that the man made allegedly resulted in $32 million being raised from investors. The funds were used in a Ponzi-scheme-like way to pay off earlier investors. Authorities say that new investor funds were used to make “profit” payments to earlier investors, therefore creating the perception that Winsome Investment Trust was a functioning and profitable investment vehicle.
The 62-year-old man will be sentenced for wire fraud in a federal court in Salt Lake City.
Mail and wire fraud has been a business crime in the United States since the late 1800’s. Wire fraud is an extremely broad crime that encompasses any fraudulent scheme to deprive others of property or honest services using mail or wire communications.