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Tuesday, November 10, 2009

Department of Justice

United States Attorney James R. Dedrick Eastern District of Tennessee


DENNIS R. BOLZE PLEADS GUILTY TO PONZI SCHEME INVOLVING $21 MILLION

KNOXVILLE, Tenn— Dennis R. Bolze, 60, formerly of Gatlinburg, Tennessee, pled guilty in federal court today before the Honorable Thomas A. Varlan, United States District Judge, to all counts in the indictment charging him with federal wire fraud and money laundering offenses arising from the ponzi scheme he has now admitted to operating from April 2002 through December 2008. Bolze's guilty plea, announced today by United States Attorney James R. "Russ" Dedrick, Special Agent in Charge Christopher Pikelis, Internal Revenue Service, Criminal Investigation Division (IRS-CI), and Special Agent in Charge Richard Lambert, Federal Bureau of Investigation (FBI), Knoxville Division, was a result of a joint investigation between the IRS-CI and the FBI.

On July 21, 2009, a federal grand jury returned an indictment charging Bolze with three counts of wire fraud and three counts of money laundering. According to court documents, Bolze has now admitted that from April 2002 through December 2008, he perpetrated a scheme to defraud individuals who invested millions of dollars with him, and his companies, Centurion Asset Management, Inc. ("CAM") and Advanced Trading Services, Inc. ("ATS"), by fraudulently representing that he would invest all of the funds entrusted to him in CAM’s and ATS’s day-trading of E-mini NASDAQ futures contracts and E-mini S&P 500 futures contracts (collectively referred to as "futures contracts"). Rather than investing all of his clients’ funds in futures contracts, Bolze has admitted to running a ponzi scheme by diverting new investor funds to existing investors, thereby lulling the existing investors into believing that they were, in fact, receiving a return on their investment through the day-trading of futures contracts through CAM and ATS. Bolze has further admitted that to keep his scheme to defraud running, to encourage additional investments, and to discourage investor withdrawals, he provided fabricated documents to investors entitled “Trader’s Invoices” that fraudulently represented to investors that he, CAM, and ATS had generated profitable returns on their investments. For the same reasons, Bolze also caused to be posted on the world wide web – at the address www.accesscam.net – fabricated day-trading results for the purpose of fraudulently representing to investors that he had generated returns on their investments.

Bolze has admitted that through his scheme to defraud he received $21,584,189 from investors, but actually invested only $1,601,188 on their behalf, and over the course of the scheme to defraud collectively experienced a substantial net loss. Of the $21,584,189 he received, $9,626,620 was returned to existing investors for the purpose of lulling them into believing that their investments with him were both safe and generating a profitable return. Bolze has admitted to using the proceeds of his scheme to defraud to purchase various real and personal properties.

United States Attorney Russ Dedrick praised the effective and quick investigation by the IRS-CI and the FBI. "Protection of our nation's financial and investment institutions remains a priority of our District and the Department of Justice as we seek to protect our citizens and the integrity of their investments," Dedrick said.

Judge Varlan has scheduled Bolze's sentencing for April 15, 2010. Bolze could receive a sentence of up to twenty (20) years imprisonment and a $250,000 fine for each of the indictment's wire fraud counts and a sentence of up to ten (10) years imprisonment and a $250,000 fine for each of the indictment's money laundering counts. Bolze is also subject to the forfeiture of all property traceable to the proceeds of his scheme to defraud. This investigation was conducted by the IRS-CI, and the FBI. Assistant U.S. Attorney F. M. (Trey) Hamilton III represented the government.

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