A Sarasota, Fla., private fund manager has been charged by the Securities and Exchange Commission with using money from investors he met at his church to pay for his 10,000-square-foot home and to pay his girlfriend, the SEC announced Wednesday.
Gaeton “Guy” S. Della Penna raised $3.8 million between 2008 and 2013 from investors through three private investment funds that he operated. Investors were told their funds would be used to trade securities or invest in small companies. Despite depicting himself as a distinguished trader and profit-maker, Della Penna lost nearly all of their money by making unsuccessful investments and diverting more than a million dollars to himself, the SEC said.
In an effort to cover up his fraud as it unraveled, Della Penna began operating a Ponzi scheme by using money from newer investors to pay fake returns to prior investors. He provided some investors with false account statements to mislead them into believing they were profiting by investing their money with him, according to the SEC complaint.
“Della Penna lied to investors about his trading track record in order to gain their trust and pocket their investments,” says Eric I. Bustillo, director of the SEC Miami Regional Office. “He fostered a false sense of security by creating bogus account statements showing positive returns when, in reality, he was operating a Ponzi scheme and stealing investor money.”
The SEC complaint was filed in U.S. District Court for the Middle District of Florida.