Canadian Man Sentenced To 262 Months In Prison For $130 Million Ponzi Scheme
SAN FRANCISCO – On February 4, 2015, William Wise was sentenced to 262 months in prison for a Ponzi scheme he perpetrated against over 1,200 victims who were seeking safe investments in certificates of deposit (CDs), announced United States Attorney Melinda Haag, Federal Bureau of Investigation Special Agent in Charge David J. Johnson, and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez.
Wise pleaded guilty on September 12, 2012. According to the Plea Agreement, Wise operated a scheme from at least as early as 1999 until approximately 2009 to sell CDs issued by three entities—Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust. Millennium Bank was a bank licensed in St. Vincent and the Grenadines, and was represented to be a wholly-owned subsidiary of United Trust of Switzerland, which was purportedly a private financial services company in Switzerland.
CDs were sold primarily out of offices established by Wise in Napa, Calif., and Raleigh, North Carolina, and staffed by various salespeople overseen by Wise. CD purchasers were told that Sterling Bank and Trust was an international private bank managed and administered in Switzerland. Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust were all controlled by Wise, though he enlisted others to aid him in selling CDs to his victims.
The CDs issued by Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust all promised CD purchasers safe investments with guaranteed rates of return—sometimes over 16%—that were allegedly based on overseas investments. In fact, CD purchasers’ funds were not used for overseas investments that generated the promised returns. The funds were instead primarily used to enrich Wise and to make interest payments to earlier CD purchasers. According to the Plea Agreement, Wise caused the sale of more than $129.5 million worth of fraudulent CDs from 2004 to 2009, causing investors to suffer actual losses of more than $75 million. He spent approximately $50 million himself, purchasing, among other things, a private plane and a luxury property in St. Vincent and the Grenadines.
Wise, 64, previously of Raleigh, North Carolina, was indicted by a federal grand jury on February 21, 2012, with one count of conspiracy, in violation of 18 U.S.C. § 1349; twelve counts of mail fraud, in violation of 18 U.S.C. § 1341; three counts of wire fraud, in violation of 18 U.S.C. § 1343; and one count of money laundering, in violation of 1957. Wise was also charged in a separate indictment originating the Eastern District of North Carolina with one count of tax evasion, in violation of 26 U.S.C. § 7201. Wise pleaded guilty to all counts.
The sentence was handed down by the Honorable Edward M. Chen, U.S. District Court Judge. Judge Chen also sentenced the defendant to a three year period of supervised release, and scheduled a hearing for April 22, 2015, at 2:30 pm, to determine a restitution amount. The defendant is in custody and will begin serving the sentence immediately.
Benjamin Kingsley and Robin Harris are the Assistant U.S. Attorneys in the Northern District of California who are prosecuting the case, with the assistance of Beth Margen and Jessica Meegan. Assistant U.S. Attorney Evan Rikhye handled the charge that originated in the Eastern District of North Carolina. The prosecution is the result of a joint investigation with the IRS-Criminal Investigation and the Federal Bureau of Investigation.