Ponzi Scheme Shake-Down Defendants Sentenced

Sep 9 2010 | 1:59pm ET

The four people who pleaded guilty to impersonating law enforcement officials as part of a bizarre scheme to shake down several investors in a hedge fund that authorities say was a Ponzi scheme have avoided jailtime.

Michael Sanders was sentenced to two years of probation and six months of house arrest. Sanders was once the bodyguard of Equity Investment Management and Trading founder Anthony Vassallo, who has been charged with defrauding about 150 investors of $40 million.

In an effort to recoup at least some of that money, authorities say that Sanders and three others went to a meeting with two businessmen and demanded that they wire $378,000 to a credit union by noon the next day. Sanders and his fellow conspirators told the victims that they were from the Federal Bureau of Investigation, Securities and Exchange Commission and attorney general’s office. The “law enforcers” wore badges and bulletproof vests, and carried handcuffs and guns.

Sanders’ co-defendants each received similar sentences. Craig Anderson and Sean Smartt also received two years probation and six months house arrest. Cassandra Moore was sentenced to two years probation.

The unidentified businessmen sent no money to the credit union.


In Depth

GSAM’s Papagiannis on Liquid Alternatives

May 25 2016 | 5:07pm ET

The popularity of liquid alternatives strategies has blossomed in recent years,...

Lifestyle

From Modern Trader: Stephen Curry is a Black Swan

May 18 2016 | 7:43pm ET

What do the rise of the Internet, the sinking of the Titanic, 9/11, and Stephen...

Guest Contributor

LendingClub and the Question of Internal Hedge Funds

May 19 2016 | 8:42pm ET

Peer-to-peer lending platform LendingClub Corp. has been in the news since the firm...