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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Illinois

FOR IMMEDIATE RELEASE
Friday, December 20, 2019

Hedge Fund Manager Sentenced to More Than 7 Years in Federal Prison in Connection with Multi-Million Dollar Swindle

CHICAGO — A Connecticut investment manager has been sentenced to more than seven years in federal prison for operating a multi-million dollar fraud scheme that swindled his friends and family members, including victims in the Chicago area.

ALVIN WILKINSON, the founder of Chicago Index Partners LP and Wilkinson Financial Opportunity Fund LP, both based in Sharon, Conn., persuaded at least 30 individuals, many of whom were his friends, family members and colleagues, to invest approximately $13.5 million in his funds.  Wilkinson, who previously served as a director at the Chicago Board Options Exchange, claimed he would trade a portfolio of financial instruments on their behalf, including options and futures, and that his trading strategy made money regardless of market conditions. 

In reality, Wilkinson did not maintain trading accounts for the funds, and he did not use investor funds to trade in options and futures.  Wilkinson often used investor funds to cover personal expenses, and he later used the money to pay earlier investors through Ponzi-type payments.  His fraud scheme began no later than 1999 and continued until 2016.

Wilkinson, 61, of Sharon, Conn., pleaded guilty earlier this year to one count of wire fraud.  U.S. District Judge Sharon Johnson Coleman on Thursday sentenced Wilkinson to seven years and four months in prison and ordered him to pay $8.032 million in restitution to the victims.

The sentence was announced by John R. Lausch, Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie, Jr., Special Agent-in-Charge of the Chicago office of the FBI.  The Commodity Futures Trading Commission, which filed a civil enforcement lawsuit against Wilkinson, provided valuable assistance.

“Defendant was a fiduciary who was supposed to act in investors’ best interest at all times,” Assistant U.S. Attorney Nicholas J. Eichenseer argued in the government’s sentencing memorandum.  “While defendant reassured investors with lie after lie, he was living lavishly courtesy of the millions he was secretly diverting to himself.”

Topic(s): 
Financial Fraud
Securities, Commodities, & Investment Fraud
Updated December 20, 2019