A New York state man was charged with defrauding investors of $19 million in a Ponzi scheme disguised as a hedge fund.
Michael Scronic, 46, of Pound Ridge was arrested Thursday and accused of cheating at least 45 friends and acquaintances who put money in his phony Scronic Macro Fund. Scronic used their money to pay $12,275 monthly rent on his Westchester County home, mortgage payments on a vacation home in Stratton, Vermont, a popular ski area, and beach club and country club fees, according to the government.
Scronic faces securities fraud and wire fraud charges. Each carries a maximum sentence of 20 years in prison. Scronic was also sued by the U.S. Securities and Exchange Commission. He’s scheduled to appear in court in White Plains, New York, Thursday. It wasn’t immediately clear whether Scronic has hired a lawyer.
Scronic reported positive returns in every quarter but one beginning in April 2010, according to the government. In reality, he lost money every quarter except the first, the U.S. said. The scam fell apart when at least four investors tried to redeem $1.5 million beginning in June.
The case is U.S. v. Scronic, 17-mj-07351, U.S. District Court, Southern District of New York (Manhattan).
This article was provided by Bloomberg News.