Feds: Broker used investor’s money for Trump Tower apartment
SUN-TIMES MEDIA WIRE June 6, 2012 11:32AM
Updated: June 6, 2012 8:59PM
A Chicago man accused of a $600,000 Ponzi-type fraud scheme spent $100,000 of the funds for a year’s rent at Trump tower, federal authorities allege.
Christopher Varlesi operated an investment trading pool, taking in about $1.4 million, but his investors lost about $600,000, according to a federal indictment announced Wednesday.
Varlesi, 53, is charged with six counts of mail and wire fraud for allegedly misappropriating a substantial portion of investor funds for his own benefit, including paying rent in May 2010 to Trump International Hotel & Tower and to make Ponzi-type payments to other investors, a release from the U.S. Attorney’s office said.
Varlesi will be arraigned at a later date in U.S. District Court. He was the sole proprietor of Gold Coast Futures & Forex, which claimed to buy and sell securities and commodities, and operate a pool of investor money for trading purposes, though he was not registered or licensed to do so.
The Illinois Securities Department assisted in the investigation, as did the Commodity Futures Trading Commission, which filed a civil enforcement lawsuit against Varlesi in March.
According to the indictment, between July 2008 and January 2012, Varlesi lied to clients about using their money to trade gold, commodity futures and foreign currency, while using the funds to make Ponzi-type payments to other investors. He told clients their investments were guaranteed to earn 5 percent to 7.5 percent per month, with no risk of loss.
Each count of wire and mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory.