MIAMI (HedgeWorld.com)–The Federal Bureau of Investigation added Donald C. O’Neill to its wanted list over his alleged involvement in a Ponzi scheme disguised as a hedge fund business.
Mr. O’Neill allegedly raised US$13 million and misappropriated at least US$10 million of that, according to the FBI. Mr. O’Neill raised the money through telephone and Internet solicitations, the FBI said The FBI also noted that a grand jury indicted the former tire representative May 20 for mail fraud, wire fraud and money laundering, the same day that a federal warrant was issued by the U.S. District Court for the Southern District of Florida.
The Commodity Futures Trading Commission took a related legal action on the matter about a year ago, noting that US$10 million of the money raised was from an investment by two Native American Hopi groups, a Fort Mojave Hopi group and the Hopi Tribal Housing Authority .
Eight companies with affiliations to Mr. O’Neill were named in the complaint: Frecom Technology, a Delaware corporation; Shelaley Holdings, LLC, a Nevada corporation; Momentum Trading Group Inc.; NDT Fund LLC; Orca Funds Inc.; Orca Capital Fund A LLC of Florida; Orca Mohave A, LLC; and Orca Hopi A, LLC.
At that time, the CFTC alleged that Mr. O’Neill spent client capital on gambling junkets, luxury cars and homes. The hedge fund manager’s wife, his mother-in-law and his brother were named as relief defendants in the CFTC case.
He allegedly spent more than US$5.7 million on a home for himself as well two other houses for family members. In addition to spending US$900,000 on airplane charters, Mr. O’Neill allegedly spent US$800,000 over a period of 45 days gambling in Las Vegas, according to the complaint. Of the money that actually wound up in a currency hedge fund he managed, US$487,000 of it evaporated in trading losses, according to the complaint.