Illinois Man Accused Of Running Ponzi Scheme

Oct 6 2009 | 11:04am ET

An accused hedge fund fraudster has been slapped with an asset freeze as federal regulators investigate an alleged $40 million Ponzi scheme.

The Securities and Exchange Commission secured the freeze against William Huber, who it says lied to investors in his three hedge funds managed by his Decatur, Ill.-based Hubadex Inc., about both their size and their returns, and used some of their money to fund his lavish bi-coastal lifestyle.

According to the SEC’s civil suit against Huber, he told investors in his Quarter Funds, Symmetry Fund and Trimester Fund that he was managing more than $40 million, when he actually had just $3 million. Huber sent out bogus account statements to his alleged victims as recently as Aug. 31 making the claim, the SEC said.

But the regulator said that’s not all Huber lied about: He allegedly told his clients that the funds were generating big returns. In fact, the SEC claims, Huber lost money on the trading that he did, but collected performance fees on the bogus returns, anyway.

The money he didn’t invest he spent on himself, the SEC said, including homes in Pelican Bay, Fla., and La Jolla, Calif.

Bernard Madoff’s downfall led to yet more lying, the SEC said. In the wake of Madoff’s massive $65 billion Ponzi scheme, Huber e-mailed his clients claiming that he was no Madoff. He is also accused of lying to agency staff during their probe.

The SEC complaint, filed in Chicago, also named Huber’s wife, Ruthann, and his funds as relief defendants.

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