Trading platform fraudster sent to prison

William Graulich IV, supposed managing partner of iVest International Holdings, was charged in a 2010 federal criminal complaint for committing a multimillion-dollar investment fraud using interstate wires.

Graulich and his partners offered investors access to an invitation-only investment platform, waiving what he claimed was a minimum $100-million investment fee.

Read: Top five investment scams

The deal was certainly sweet: investors’ funds would be used as collateral to obtain a line of credit used to trade financial instruments, and they were promised weekly returns of 22% — all with no risk. Also, all funds would be deposited into what he called “a secure non-depletion attorney account.” (This account doesn’t actually exist.)

In 2008, one victim wired $4.4 million into the JP Morgan non-depletion attorney account. While Graulich did send the investor $1 million in false returns, he used the rest of the money to make tax, mortgage and legal payments, as well as pay personal expenses.

On May 17, 2012, Graulich was sentenced to 70 months in prison and three years of supervised release. He was ordered to pay $3.6 million in restitution.

Bill Singer, Wall Street blogger, has long warned against trading platform deals.

Also, read “Canadians under rate fraud risk” for some tips on dealing with fraud.