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Seattle man pleads guilty to Ponzi scheme

SUNDAY, JULY 21, 2013

SEATTLE – After living a luxurious style that included Bentleys, yachts and nightclubs, a Seattle man pleaded guilty Friday in federal court to wire fraud and money laundering charges in what officials described as a “classic” Ponzi scheme, the U.S. attorney’s office announced.

Jose L. Nino de Guzman’s scheme involved fake investment opportunities in Peru under his NDG Investment Group from 2006 until 2009, officials said, raising more than $30 million from more than 200 investors.

Prosecutors say the investments as described to investors did not occur. Following the classic Ponzi-scheme style, he would pay old investors with money raised from new ones.

De Guzman was a University of Washington student who worked as a U.S. Bank teller. By 23, he dropped out of school and began to create his investment company, withholding information about his background to investors. He told investors he worked as a business and commercial lending officer, specializing in fixed income with a focus on real estate.

The fraud funded a lavish lifestyle, including the purchase of a $365,000 diamond ring, a $600,000 yacht, a $250,000 suite at Qwest Field for Seahawks games and a $200,000 Bentley automobile. De Guzman would pitch his investment opportunities at expensive downtown clubs and hotels.

The scheme was first noticed by an employee of NDG, who employed friends and parents of the people de Guzman was defrauding. In 2009, the Washington State Department of Financial Institutions issued a cease and desist order against de Guzman.

De Guzman is scheduled to be sentenced in November. Prosecutors are recommending 12 years in prison.


 

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