News and Press Releases

Pennsylvania man pleads guilty to multimillion-dollar investment fraud



FOR IMMEDIATE RELEASE
September 23, 2011


 

CAMDEN, N.J. – William Graulich IV, purported managing partner of iVest International Holdings, Inc., admitted today to conspiring to solicit victims to invest millions based on his false promises, New Jersey U.S. Attorney Paul J. Fishman announced.

Graulich, 54, of Henryville, Pa., pleaded guilty to an Information charging him with wire fraud conspiracy for scheming to perpetrate a multimillion-dollar investment fraud using interstate wires. Graulich entered his guilty plea before U.S. District Judge Robert B. Kugler in Camden federal court.

According to the Information and the admissions made in court today by Graulich:

Graulich and his co-conspirators represented that they had an “exclusive” investment platform available by invitation only that had been open previously only to those able to invest at least $100 million. Graulich and his co-conspirators pitched the investment platform to a victim identified in the Information as “D.G.,” and others, stating that any investment would be held in a non-depletion attorney account and would not be at risk. Investors were told that the monies in the non-depletion account would be used as collateral to obtain a line of credit, which would be used to trade financial instruments, including medium term notes and standby letters of credit. Graulich and his co-conspirators promised weekly returns of 22 percent.

Based on Graulich’s false representations and willingness to waive the purported $100 million minimum investment requirement, D.G. invested approximately $4.4 million with Graulich, wiring $2.8 million in August 2008 and $1.6 million in November 2008 to a JPMorgan Chase Bank account maintained by Graulich in Morristown, N.J. D.G. wired the money pursuant to an executed Joint Venture Agreement D.G. had with Graulich, which contained numerous false representations.

From December 2008 through January 2009, Graulich paid D.G. approximately $1 million in “returns,” which actually consisted of money from D.G.’s own investment, before discontinuing payments altogether. In addition to paying phony returns back to D.G., Graulich used some of the investor’s money to pay for his personal expenses, including $57,244 for the purchase of a Jaguar, approximately $100,000 for tax payments, approximately $10,000 for mortgage payments, approximately $25,000 for legal expenses, and approximately $100,000 for professional baseball tickets.

The wire fraud conspiracy charge to which Graulich pleaded guilty carries a maximum potantial penalty of 20 years in prison and a $250,000 fine. Sentencing is currently scheduled for January 12, 2012.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, and postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Philip R. Bartlett, for their work in the investigation. He also thanked the U.S. Securities and Exchange Commission’s Philadelphia Regional Office, under the leadership of Regional Director Daniel Hawke.

The government is represented by Assistant U.S. Attorney Christine Magdo of the U.S. Attorney’s Office Economic Crimes Unit in Newark.

11-385                                                                                         

Defense counsel: Jay V. Surgent Esq., Lyndhurst, N.J.

Graulich, William Information

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