BULLETIN: SEC Halts Alleged $105 Million Ponzi Scheme Operating ‘Offshore’; Daniel Spitzer Charged In Complex International Fraud Case; Several Agencies Credited With Assisting Probe

Saying his offshore Ponzi scheme was on the verge of collapse but still collecting money, the SEC has charged a resident of the U.S. Virgin Islands with fraud.

Several international authorities assisted in the probe, the SEC said.

Daniel Spitzer, a U.S. citizen who resides in St. Thomas, was charged in the scheme. The SEC said the scheme netted $105 million and roped in 400 investors, dating back “at least” to 2004.

Spitzer is 51, and “desperate for money” to keep the scheme afloat, the SEC charged, describing him as a “purported fund manager.”

“Daniel Spitzer ran an elaborate Ponzi scheme that he disguised by moving investor money through a complex network of foreign bank and brokerage accounts,” said Merri Jo Gillette, director of the SEC’s Chicago Regional Office. “He deceived investors into believing that he was using a sophisticated investment strategy that didn’t really exist.”

In an emergency action in Illinois, the SEC said the scheme was on the verge of collapsing and that Spitzer still was collecting money in March to prevent its collapse. Earlier, Spitzer spent more than $900,000 “in cash at the Wynn Las Vegas Casino,” the agency said.

“Since at least August 2009 and continuing through to the present, Spitzer has attempted to delay and avoided paying requested investor redemptions,” the SEC charged. “Spitzer is desperate for money and has continued to prey on victims.”

Spitzer was spending money at the casino in October 2009, even as he was delaying payments to investors, according to court filings.

Also named defendants in the case were these Spitzer-connected companies: Kenzie Financial Management Inc. of St. Thomas; Kenzie Services LLC of Nevis; Draseena Funds Group Corp., an Illinois corporation with offices in Clearwater, Fla., and Stateline, Nev.; DN Management Co. LLC of Nevada; Aneesard Management LLC, also known as Nerium Management Co. LLC of Nevada; Nerium Management Co. of Illinois; Arrow Fund LLC of Nevada; Arrow Fund II LLC of Nevada; Conservium Fund LLC of Nevada; Nerium Currency Fund LP of Nevada; Senior Strength Q Fund LLC of Nevada; SSecurity Fund LLC of Nevada; Three Oaks Advanced Fund LLC of Nevada; Three Oaks Currency Fund LP of Nevada; Three Oaks Fund 25 LLC of Nevada; Three Oaks Senior Strength Fund LLC of Nevada; and USFirst Fund LLC of Nevada.

Just three months ago, the SEC said, Spitzer railroaded an investor for $100,000 by telling the investor the money would be used “in one of Spitzer’s more conservative investment funds.

“Rather than invest in said fund, in April 2010, Spitzer used this investor’s money to make $9,492 in Ponzi payments to four other investors, transferred $27,102 to the First Bank of Puerto Rico, and paid $26,257 for third party expenses,” the SEC charged.

Assisting in the probe were the U.S. Commodity Futures Trading Commission, the Irish Financial Regulator, Danish Financial Supervisory Authority, Autorité des marches financier in France, the Ontario Securities Commission and the Financial Intelligence and Investigations Unit Attached to the Royal Anguilla Police Force in Anguilla, the SEC said.

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17 Responses to “BULLETIN: SEC Halts Alleged $105 Million Ponzi Scheme Operating ‘Offshore’; Daniel Spitzer Charged In Complex International Fraud Case; Several Agencies Credited With Assisting Probe”

  1. I followed kenzie global since 1985 in don rowes wall street digest news letter during which time he recommended the fund to his subscribers. The fund minimum was one million dollars until about 1995. They then had set up a limited partnership of 100K minimum. I then took the plunge in 1998 for 100K. I gradually added more to the funds over the next seven years from my IRA & 401K until I had around 1.5 million in IRA money and 300K in 401k in the various various draseena funds. The monthly and later quarterlyreports showed 2.6 million in the funds 04/09 at which time I asked for a 1.6 million redemption. I received about 255K. Al gerebizza visited me 2x to see if I would put more money in the funds. I declined even though he gave assurance the fund is all about preserving capital and conservative investments in foreign gov bonds whose currency should appreciate against the US dollar. He also tried to talk me out of redeeming some of my assets which caused me to doubt the honesty of gerebizza and spitzer. The rest is history.

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  2. I had tried since May 2009 to get a redemption on mt 3Oaks&Senior Stength acct but only got lies

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  3. Well as mentioned above, I got into this Kenzie Global scam on the recommendation of Don Rowe in his Wall Street Digest back in 1998. I find it strange that a well known “market guru” would have been pounding the table for Spitzer and Gerebizza over a 12 year period and not know the obvious signs that this was a Ponzi. I met with Al Gerebizza in Atlanta in early 2007 after I had made the investment blunder of my life by sending them nearly a million dollars a few months earlier by investing in both a 3 Oaks and Arrow Fund. They had earlier repaid another smaller investment as I had redeemed a little at a time from another 3 Oaks Fund which I had held since 2000 so I was ripe for the picking by then. I remember thinking that Gerebizza looked a lot like Stephen Segal, whom I have never liked. I should have followed my gut and redeemed more quickly. I first ran into trouble with these guys back in Oct 2009 while Spitzer was reportedly spending the last of my money in Las Vegas. I spoke with him on the phone numerous times from then all the way up until one week prior to his Court date on May 25 and he always maintained that he was being railroaded by some falacious lawsuits to the end but in my heart I knew that I had been had and would be lucky to ever see another dime of my money. We live and we learn.

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  4. I am a victim of Daniel Spitzer’s ponzi scheme and would like to know if he has been criminally charged officially and whether a trustee has been appointed to freeze all assets of Spitzer and the funds in question. I know that a criminal complaint has been made by the Postal Service but I don’t know whether there is an official charge. Thanks

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  5. I am a victim of Daniel Spitzer’s ponzi scheme and would like to know if he has been criminally charged officially

    Hello Jeffrey,

    Yes. Spitzer has been charged. He is listed as a prisoner at a federal detention facility (MCC Chicago). Whether he will make bail is unclear.

    Patrick

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  6. I am a victim as well! I hope the Sec is investigationg all of the sales people MANNY SARRIS & WALTER SALVADORE as well. They say they had $ in the fund but I feel the $ was a front incase the Ponzi scheme fell apart. They made Millions since the mid90s and could afford to have front cover $ in the fund. Further,Where is all the millions they made since the mid 90s ??? It did not go back into the fund.The only have 3 to 4 million reported in the fund that they say they lost. Good try… I hope the SEC sees thru there cover up…

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  7. AL Gerebizza supplied our firm with technical anaylysis for many years. His analysis and background on market research was upscale and informative. Ive never known him to ever recommend a specific investment of any sort.

    william: I followed kenzie global since 1985 in don rowes wall street digest news letter during which time he recommended the fund to his subscribers. The fund minimum was one million dollars until about 1995. They then had set up a limited partnership of 100K minimum. I then took the plunge in 1998 for 100K. I gradually added more to the funds over the next seven years from my IRA & 401K until I had around 1.5 million in IRA money and 300K in 401k in the various various draseena funds. The monthly and later quarterlyreports showed 2.6 million in the funds 04/09 at which time I asked for a 1.6 million redemption. I received about 255K. Al gerebizza visited me 2x to see if I would put more money in the funds. I declined even though he gave assurance the fund is all about preserving capital and conservative investments in foreign gov bonds whose currency should appreciate against the US dollar. He also tried to talk me out of redeeming some of my assets which caused me to doubt the honesty of gerebizza and spitzer. The rest is history.

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  8. I know Don Rowe and his letter is a pen pal type letter that you can take with a grain of salt. I’ve lost and made money with some of his suggestions. Ultimately the choice is mine. I also know Al Gerebizza and he definetly can forecast long term market trends and cycles. I sold my real estate because of his technical analysis and saved a lot of money. My experence with him was excellent.

    Stephen Turner: Well as mentioned above, I got into this Kenzie Global scam on the recommendation of Don Rowe in his Wall Street Digest back in 1998. I find it strange that a well known “market guru” would have been pounding the table for Spitzer and Gerebizza over a 12 year period and not know the obvious signs that this was a Ponzi. I met with Al Gerebizza in Atlanta in early 2007 after I had made the investment blunder of my life by sending them nearly a million dollars a few months earlier by investing in both a 3 Oaks and Arrow Fund. They had earlier repaid another smaller investment as I had redeemed a little at a time from another 3 Oaks Fund which I had held since 2000 so I was ripe for the picking by then. I remember thinking that Gerebizza looked a lot like Stephen Segal, whom I have never liked. I should have followed my gut and redeemed more quickly. I first ran into trouble with these guys back in Oct 2009 while Spitzer was reportedly spending the last of my money in Las Vegas. I spoke with him on the phone numerous times from then all the way up until one week prior to his Court date on May 25 and he always maintained that he was being railroaded by some falacious lawsuits to the end but in my heart I knew that I had been had and would be lucky to ever see another dime of my money. We live and we learn.

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  9. Quick note:

    The comments from “Satisfied” and “Michael” above in support of Al Gerebizza were made on the same date — Sept. 10 — and were received within seven minutes of one another.

    The comments from “Satisfied” and “Michael” both originated at the same IP. Two different email addresses were used.

    This morning, the PP Blog opened an email that purported to be from Al Gerebizza. The subject line of the email was, “Potential Law Suit.” The email was dated Sept. 12, two days after the date of the comments in support of Al Gerebizza posted by “Satisfied” and “Michael” above.

    The email from the person who purported to be Al Gerebizza did not say what reader comment or comments he was complaining about or describe the comments he deemed unfair, untrue and libelous. It did, however, threaten to sue the PP Blog:

    “Dear Sirs. Your web site mentions my name without my permission and it and I will sue you personally as well as your web site for slander as well as other charges. I respectfully demand you remove my name.”

    The email threat does not even describe what specific comments the purported Al Gerebizza is concerned about — i.e., the supportive comments from “Satisfied” and “Michael” that both originated at the same IP within seven minutes of each other three days ago or the older comments from “william” and “Stephen Turner” that referenced the name of Al Gerebizza.

    Here is a document from 2001 that references Alfred Gerebizza and Daniel Spitzer:

    http://www.sec.gov/news/digest/2001/dig032901.pdf

    Here is a link to info on a recently filed lawsuit in which the plaintiffs were having trouble serving Albert Gerebizza, also known as Alfred Gerebizza.

    http://dockets.justia.com/docket/nevada/nvdce/3:2009cv00737/70666/

    I find it interesting that two comments in support of Al Gerebizza were sent to the PP Blog within seven minutes of one another on the same date from the same IP — by posters who used different user names and different email addresses — and then a third person emailed a threat to sue two days later.

    Patrick

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  10. What cracks me up is that all these people insist on threatening to sue people for slander for things they have written. Slander is spoken and libel is written. It is difficult to take threats seriously when the “threateners” don’t even know the difference. Hope you’re trembling Patrick.

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  11. alasycia: Hope you’re trembling Patrick.

    Oh, he is.

    Hysterical laughter will do that to a person.

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  12. Patrick, have you retained a “potential lawyer” to defend you in this potential law suit ??? Wait, I just mentioned your name, without your permission… PLEASE don’t potentially sue me!!! I cannot afford a potential/imaginary lawyer!

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  13. I am also a victim.
    Why is Spitzer only individual named as defendant in SEC litigation? He must have had many sharing in the ‘spoils’ (my money).
    Do you know anything about alledged mail fraud case in Northern District of Illinois filed on 8/2/10?

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  14. WHOA. So typical… Knew them when…

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  15. schmuck: I am also a victim.
    Why is Spitzer only individual named as defendant in SEC litigation? He must have had many sharing in the ‘spoils’ (my money).
    Do you know anything about alledged mail fraud case in Northern District of Illinois filed on 8/2/10?

    Spitzer was indicted on 8 counts of mail fraud in February this year, and will be arraigned “at a later date”

    “The government is being represented by Assistant U.S. Attorney Madeleine Murphy. The United States Attorney’s Office acknowledges the assistance of the Securities and Exchange Commission, Chicago Regional office. The investigation was conducted by the United States Postal Inspection Service and the FBI.

    Each count of mail fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory.

    In addition to the charges, the government is also seeking forfeiture in the amount of approximately $34 million in funds, the approximate amount of loss to the victims. The Court may also impose a fine totaling twice the loss to any victim or twice the gain to the defendant, whichever is greater. If convicted, however, the Court must impose a reasonable sentence under the advisory United States Sentencing Guidelines”

    http://mchenrycountyblog.com/category/kenzie-funds/

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  16. OMG! I came close to putting money with these crooks. I met them in 2008 and after several months of research, I decided this was for me or my clients.

    About a year later, I googled them and really wasn’t shocked.

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