Alfred Gerebizza Arrested In $105 Million Ponzi Case; PP Blog Received Threatening Communication About Alleged Fraud Caper Last Year
UPDATED 5:25 P.M. EDT (U.S.A.) Alfred Gerebizza has been charged with mail fraud and tax crimes in a superseding indictment in the Daniel Spitzer Ponzi case, which alleged both domestic and offshore fraud. The SEC initially charged Spitzer civilly in June 2010, accusing him of “moving investor money through a complex network of foreign bank and brokerage accounts” and spending more than $900,000 “in cash at the Wynn Las Vegas Casino.”
Spitzer later was charged criminally after investigations by the FBI, the U.S. Postal Inspection Service and the IRS.
Gerebizza, 56, formerly resided in the Chicago suburb of Crystal Lake. A criminal indictment against him was unsealed last month, and Gerebizza surrendered in Atlanta, federal prosecutors in the Northern District of Illinois said yesterday. He is in federal custody at a prison facility in Chicago, according to records.
The superseding indictment naming Gerebizza as a new criminal defendant with Spitzer alleges that Gerebizza was a pitchman who “held himself out as a trader for a dozen investment funds, known collectively as the ‘Kenzie Funds,’ purportedly operated by Kenzie Financial Management in the U.S. Virgin Islands.”
Spitzer was a Kenzie principal, prosecutors said. He has been charged with 10 counts of mail fraud.
Gerebizza faces 10 counts of mail fraud and six counts of filing bogus tax returns. Both men were named in forfeiture allegations that seek $34 million.
“Through sales agents and various marketing materials, they informed investors and potential investors that their investments would be used primarily in foreign currency trading, that the Kenzie Funds had never lost money, and had achieved profitable historical returns,” federal prosecutors said of Spitzer and Gerebizza. “The defendants had to continually raise funds through the solicitation of new investors in the Kenzie Funds to make payments on investments made by earlier investors, all of which they concealed and intentionally failed to disclose to both new and earlier investors. Ultimately, between 2004 and July 2010, the defendants allegedly raised approximately $105 million from investors, misappropriated a significant portion of those funds, and caused losses totaling approximately $34 million.”
On Sept. 12, 2010, the PP Blog received a communication purportedly from Gerebizza that threatened a lawsuit if the Blog did not remove Gerebizza’s name and/or alter or delete comments from readers.
“I will sue you personally as well as your web site for slander as well as other charges,” the communication read in part.
The Blog did not submit to the threat. Instead, the Blog reported on the threat.
It is somewhat common for the PP Blog to receive threatening communications related to its coverage of Ponzi probes.