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US$105 million Ponzi scheme in Virgin Islands


rhondathompson, [email protected]

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CHARLOTTE AMALIE, U.S. Virgin Islands – A Virgin Islands-based financial manager ran a US$105 million Ponzi scheme that defrauded 400 investors by falsely claiming to invest in foreign currencies, the US Securities and Exchange Commission said in a civil fraud case announced today.Daniel Spitzer invested only a fraction of the money he took from investors while channeling the rest into offshore bank accounts, paying off early investors to keep the scheme going or pay for a lavish lifestyle that included spending nearly US$1 million at a Las Vegas casino, the SEC said in a civil complaint.Spitzer, 51, operated Kenzie Financial Management Inc. in St. Thomas in the US Virgin Islands but and ran a network of companies in the US and the Caribbean. The SEC filed its complaint in Illinois where one of his companies, Draseena Funds Group, Corp., is based, and some of the investors live.The SEC said that Spitzer ran the scheme since at least 2004, with him and his sales representatives falsely claiming that the investment funds had never lost money.

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