Former Faculty Member at UW Business School Pleads Guilty to Wire Fraud in Connection with ‘Ponzi’ Scheme
Defendant used Former Academic Post at UW to Tout Investment Adviser Business
A Seattle man who operated an investment advisory business for more than 20 years, pleaded guilty to wire fraud today in U.S. District Court in Seattle, announced U.S. Attorney Annette L. Hayes. SATYEN CHATTERJEE, a/k/a Satyen Chattopadhyay, 65, owned and operated Strategic Capital Management, Inc. from 1992 until the Washington State Department of Financial Institutions ordered it to cease operating illegally in October 2013. CHATTERJEE, who once taught at the University of Washington Business School, admitted engaging in a scheme to defraud investors between 2007 and 2013. Sentencing is scheduled before U.S. District Judge Thomas S. Zilly on August 20, 2015.
According to records filed in the case and with the Department of Financial Institutions (DFI), the investigation revealed that at least five victims were defrauded of more than $600,000. CHATTERJEE convinced various investors to make investments with him in what he represented were fixed rate securities. But in fact CHATTERJEE transferred the funds to his own bank accounts, used the money for his own expenses, or lost it as a day trader in the stock market. CHATTERJEE also solicited and accepted investments in a nutritional supplement company called Metamune, Inc, but instead of actually using the money for the nutritional supplement company, CHATTERJEE used the money for his own expenses or to pay off prior investors in the fixed rate securities scheme.
For one investor CHATTERJEE created a false account statement making the investor believe his investment was secure. In 2011, CHATTERJEE sent a series of lulling emails to some clients falsely indicating that long time investment associates had defaulted on agreements he had with them, and blaming them for losses in the investments.
Under the terms of the plea agreement, prosecutors will recommend no more than 63 months in prison for CHATTERJEE. However, Judge Zilly is free to sentence CHATTERJEE up to the statutory maximum of 20 years in prison.
The case was investigated by the Washington State Department of Financial Institutions (DFI) and the FBI. The case is being prosecuted by Assistant United States Attorney Justin W. Arnold and Special Assistant United States Attorney Robert Kondrat. Mr. Kondrat is an attorney with DFI.