MIAMI (HedgeWorld.com)–Donald C. O’Neill, wanted by U.S. law enforcement officials for nearly a year in connection with defrauding investors using bogus south Florida currency hedge funds, was arrested March 29 in Rome.
Details of the circumstances that led authorities to Mr. O’Neill were unavailable by press time, but in a news release the U.S. Attorney for the Southern District of Florida, Marcos Jim?nez, praised the work of the FBI and the Commodities Futures Trading Commission.
Mr. O’Neill, whose occupations on the FBI “Wanted” poster issued in September were listed as “Investment Consultant and Trader” and “Tire Salesman,” was wanted in connection with an alleged Ponzi scheme that raised more than US$13 million from 38 investors (see Previous HedgeWorld Story). Mr. O’Neill is accused of taking at least US$10 million of that money and spending it on homes, luxury cars, airplane charters and gambling in Las Vegas casinos.
On May 20, 2003, a federal grand jury handed down a 40-count indictment that included charges of mail fraud, wire fraud and money laundering against Mr. O’Neill.
Mr. O’Neill, his wife, his brother and his mother-in-law also were the subject of a September 2002 CFTC complaint alleging Mr. O’Neill defrauded investors in hedge funds that were supposed to trade foreign currency futures. Also named in the complaint were a number of companies Mr. O’Neill controlled–Frecom Technology Corp., Momentum Trading Group Ltd., Orca Funds Inc. and Shelaley Holdings LLC–as well as the funds he used to defraud investors: NDT Fund LLC, Orca Capital Fund A LLC, Orca Mojave A LLC and Orca Hopi A LLC.
The CFTC complaint alleges that Mr. O’Neill spent US$3 million on homes for himself, his wife and his mother-in-law; spent another US$900,000 in airplane charters; and lost US$800,000 over 45 days of gambling in Las Vegas. With the money he actually invested, Mr. O’Neill generated losses of close to US$490,000.
If convicted, Mr. O’Neill faces up to 20 years in prison on each of the 40 criminal counts against him and millions of dollars in fines.