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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of New York

FOR IMMEDIATE RELEASE
Monday, October 29, 2018

Investment Adviser Sentenced to 100 Months in Prison for Stealing Investors’ Money While on Pre-Trial Release for Another Fraud Scheme

Defendant Misappropriated Over $1.1 Million of Investor Funds to Buy a Luxury Car, Renovate His Home and Pay His Defense Counsel in a Related Criminal Case

Earlier today, Louis F. Petrossi, the founder and president of the Wealth Research Institute, a purported investment research firm, was sentenced by United States Chief District Judge Christopher C. Conner of the Middle District of Pennsylvania to 100 months and three days in prison for stealing investors’ money.  The sentence will run concurrent (with three days consecutive) to the 44-month sentence he received in the Eastern District of New York in May 2017 for his role in the ForceField Energy Inc. securities fraud scheme. On March 8, 2018, following a four-day trial, a federal jury in the Middle District of Pennsylvania found Petrossi guilty of securities fraud, investment adviser fraud and wire fraud. Petrossi was also ordered to pay $2,265,735.84 in restitution and $1,170,940 in forfeiture.   

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the sentence.

“Petrossi abused the trust placed in him by investors, many of whom reported that they suffered significant loss of savings for retirement and education expenses as a result of his scheme.  With today’s sentence, Petrossi has been held responsible for misappropriating more than $1 million of investor funds for his personal use – a fraud he carried out while on pre-trial release for a related criminal case in the Eastern District of New York,” stated United States Attorney Donoghue.  Mr. Donoghue expressed his appreciation to the United States Attorney’s Office for the Middle District of Pennsylvania for their assistance with the case.

Between January 2015 and January 2017, Petrossi solicited more than $1.8 million in investments in one of his “Chadwicke” funds from more than 25 investors, including an investor residing in the Middle District of Pennsylvania.  Petrossi promoted Chadwicke as an opportunity to invest in high-profile startup companies such as Lyft, Inc., Maplebear Inc., Pinterest Inc., Spotify Technology SA and Palantir Technologies, Inc., among others.  Petrossi invested approximately $665,400 in privately held startup companies but used more than $1.1 million in investor funds to pay for personal expenses, including payment for his BMW, renovations to his home and payment of his legal fees.   

On May 3, 2016, Petrossi was arrested in Nevada pursuant to an indictment returned by a federal grand jury in the Eastern District of New York for his role in a securities fraud scheme involving ForceField Energy Inc.  Under the terms of Petrossi’s pre-trial release, he was prohibited from employment “directly involving the handling of investors.”  Nevertheless, Petrossi continued to engage in the Chadwicke scheme.

The fraud charges pursuant to which the defendant was sentenced today were initially brought as part of the ForceField Energy case, but were subsequently transferred to the Middle District of Pennsylvania.

The Chadwicke securities fraud case is being prosecuted by Assistant United States Attorney Mark E. Bini of the Eastern District of New York’s Business and Securities Fraud Section and Special Assistant United States Attorney John O. Enright of the United States Securities and Exchange Commission’s Enforcement Division.

The Defendant:

LOUIS F. PETROSSI
Age:  77
Residence: Reno, Nevada

M.D.P.A. Docket No. 17-CR-192 (CCC)

Topic(s): 
Securities, Commodities, & Investment Fraud
Contact: 
John Marzulli Tyler Daniels United States Attorney’s Office (718) 254-6323
Updated October 29, 2018