Investment Manager Arrested On Fraud And Misappropriation Charges In Alleged Multi-Million Dollar Swindle
CHICAGO — A Connecticut investment manager has been arrested for allegedly operating a multi-million dollar fraud scheme that swindled approximately 30 individuals, including victims who reside 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 approximately 30 individuals to invest approximately $13 million in his funds, according to an indictment returned in federal court in Chicago. Wilkinson’s marketing materials to potential investors noted his prior affiliation with the Chicago Board Options Exchange, where he previously served as a Director. Instead of investing the funds as promised to clients, Wilkinson used the victims’ money to cover personal expenses and to pay earlier investors through Ponzi-type payments, the indictment states.
The indictment was returned Tuesday and ordered unsealed after Wilkinson’s arrest Wednesday morning in Connecticut. The indictment charges Wilkinson, 58, of Sharon, Conn., with three counts of mail fraud and one count of wire fraud. A court date in Chicago has not yet been scheduled.
The indictment seeks forfeiture of $13 million in cash, as well as a property in Sharon, Conn.
The charges were announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; and Michael J. Anderson, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation. The Commodity Futures Trading Commission, which previously filed a civil enforcement lawsuit against Wilkinson, provided valuable assistance.
According to the indictment, Wilkinson was the sole officer of his funds and had exclusive authority to manage their operations. Investors in the funds included Wilkinson’s friends, acquaintances and former colleagues. Wilkinson 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 any trading accounts for the funds, and he did not use investor funds to trade in options and futures, according to the indictment.
The fraud scheme alleged in the indictment began no later than 1999 and continued until at least May 2016.
The public is reminded that an indictment is not evidence of guilt. The defendant is presumed innocent and entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.
Each count of the indictment is punishable by up to 20 years in prison. If convicted, the Court must impose a reasonable sentence under federal statutes and the advisory U.S. Sentencing Guidelines.
The government is represented by Assistant U.S. Attorney Nicholas Eichenseer.