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March 06, 2006 at 07:00 PM
CLEVELAND (HedgeWorld.com)–It probably seemed like a good idea at the time. Start a couple of hedge funds, raise a little money and get rich like the guys in the magazines.
Only for Jesse Bonner, 28, of Mantua, Ohio, the plan hit a few snags, culminating Thursday [Feb. 23] in a securities fraud charge filed against him by the U.S. Attorney’s Office for the Northern District of Ohio.
As it happened, Mr. Bonner wasn’t registered to sell securities in Ohio, or anywhere else for that matter, according to the U.S. Attorney’s Office complaint. And if he ever tried trading he wasn’t very good at it; Mr. Bonner’s “hedge funds” lost money every year for four years. Also, he didn’t follow the first rule of a good Ponzi scheme: keep raising money so you can pay off investors who get suspicious and demand their money back.
Mr. Bonner began his quest to be a hedge fund manager in late 2001. By September of last year, the FBI had caught up with him, but not before he spent at least some of the US$1.5 million he raised from among 38 investors in six states on himself. In its complaint, the U.S. Attorney’s Office charged Mr. Bonner with one count of securities fraud for lying to investors about what he was doing with their money, making up false returns, and creating fictional documents to cover his tracks.
