Federal officials have accused an Illinois man of misusing money that was supposed to be invested in a life settlement fund and other investment funds.
The defendant, Scott M. Ross, was charged with three counts of mail fraud in a criminal case filed in the U.S. District Court in Chicago by the U.S. attorney for the Northern District of Illinois and the Federal Bureau of Investigation.
Ross was charged with misusing money he raised from investors for his own benefit and of making Ponzi-scheme-type payments to customers who complained, officials say.
Ross owned Harbor Wealth Management L.L.P., Schaumburg, Ill., and two subsidiaries that professed to be in the insurance investment business, officials say.
Between 2006 and 2009, Ross’s businesses offered investments in the Elucido Fund L.P., the Moondoggie Fund L.P. and the Maize Fund L.P., according to officials in the U.S. attorney’s office in Chicago. Ross raised $1.9 million from about 25 investors in the Elucido Fund, which claimed to invest in life settlement contracts, officials say. He also raised about $3 million from 134 investors in the Moondoggie Fund, which invested in a company that was purported to be developing a dual-sided computer monitor, officials say.
Ross caused more than 150 of the investors to lose about $5 million by pocketing funds for his own benefit, officials say. They say he misled investors about his business and investment background and the likely risks and returns on their investments.