CHICAGO (CBS) — A man from northwest suburban Fox Lake has been sentenced to 4 ½ years in prison for concucting a Ponzi scheme that cheated more than two dozen people of $3.3 million.
Joseph A. Dawson, 49, pleaded guilty last fall to three counts of wire fraud, according to a release the U.S. Department of Justice.
Dawson misappropriated more than $1 million of investors’ funds for his own benefit, according to the release. He also used investors’ funds to pay promised returns to other investors.
Dawson was sentenced Tuesday and ordered to forfeit approximately $3.3 million, which represented the loss to investors, according to the release.
Dawson was a commodity futures and securities trader who owned an investment fund called the LEAP Fund since about 2001, according to the release. He also owned Dawson Trading LLC, which operated in Ingleside, Fox Lake and later in Lakemoor. The company took over the business and customers of the LEAP Fund in about 2004.
Between 2004 and September 2009, Dawson offered and sold to 26 investors approximately $3.7 million of guaranteed investments in Dawson Trading, according to the release. These investors included former customers of the LEAP Fund.
These investments were primarily in the form of promissory notes, which guaranteed the safety of the invested funds and promised to pay a fixed annual return as well as much as 80 percent of any trading profits, according to the release. Dawson misrepresented the profitability, safety and use of the funds raised from investors, as well as the status of the investments.
Instead of investing the funds as promised, Dawson used a significant portion for personal expenses, like his home, the construction of a swimming pool, landscaping and three automobiles, according to the release. He concealed the fraud to investors by lying about the status of their accounts by creating and distributing fraudulently inflated periodic account statements.
Dawson begins serving his sentence June 15.
(The Sun-Times Media Wire contributed to this report.)