SEATTLE (AP) — After living a luxurious style that included Bentleys, yachts and nightclubs, a Seattle man pleaded guilty Friday in federal court to wire fraud and money laundering charges in what officials described as a “classic” Ponzi scheme, the U.S. Attorney’s office announced.
Jose L. Nino de Guzman’s scheme promoted fake investment opportunities in Peru under his NDG Investment Group from 2006 until 2009, officials said, raising more than $30 million from over 200 investors.
Prosecutors say the investments, as described to investors, did not occur. Following the classic Ponzi strategy, he paid old investors with money from new ones.
De Guzman was a University of Washington student who worked as a U.S. Bank teller. By age 23, he dropped out of school and began to create his investment company, falsely describing his background to investors. He claimed he worked as a business and commercial lending officer, specializing in fixed income with a focus on real estate.
“This defendant brazenly and persistently defrauded investors by lying about his background and success and misused millions of their dollars for his personal benefit,” said U.S. Attorney Jenny A. Durkan in a statement. “His victims included family members, friends and co-workers who did not know he paid for his glitz with their money. When the scheme crumbled, they sadly learned that Mr. De Guzman had perpetuated a massive fraud.”
The fraud funded a lavish lifestyle, including the purchase of a $365,000 diamond ring, a $600,000 yacht, a $250,000 suite at Qwest Field for Seahawks games and a $200,000 Bentley automobile. De Guzman pitched his investment opportunities at expensive downtown clubs and hotels.
The scheme was first noticed by an employee of NDG, which employed friends and parents of De Guzman’s victims. In 2009, the Washington State Department of Financial Institutions issued a cease-and-desist order concerning his fraudulent sales of investment opportunities.
De Guzman is scheduled to be sentenced in November. Prosecutors are recommending 12 years of prison.
