Owner of Investment Firm Charged with Running Multi-Million-Dollar Ponzi Scheme April 1, 2010Posted by jefhenninger in News.
Tags: Ponzi scheme
Donald Anthony Young was charged today by indictment with one count of mail fraud and one count of money laundering. The charges relate to Young’s execution of a Ponzi scheme in which his investors lost more than $25 million. Young operated an investment advisory business in Kennett Square, Pennsylvania, which was known by various names including Acorn Capital Management II LP, Acorn Capital Management LLC, and Acorn II LP. According to the indictment, Young solicited individuals to invest with him, claiming that he would invest their funds in the stock of large stable companies. Ultimately, Young obtained more than $95 million from his investors. Instead of investing all of these funds as promised, Young allegedly diverted more than $25 million of investor funds for his own use, purchasing, among other things, luxury homes for himself in Palm Beach, Florida; Coatesville, Pennsylvania; and Northeast Harbor, Maine.
“According to the indictment, this defendant helped himself to others’ fortunes, living a life of luxury, with little or no regard for the damage to our financial markets, our economy, and the reputation of the investment advisors who follow the rules.”
Because Young was allegedly stealing millions of dollars from his investors and using that money to pay his own personal and business expenses, he was unable to pay investors when they requested redemptions and he was forced to liquidate other investors’ funds to pay these redemptions. The indictment further alleges that when the United States Securities and Exchange Commission opened an investigation into Young’s business, Young attempted to obstruct the investigation by providing false and misleading information to the SEC and by refusing to provide the SEC documents, to which it was legally entitled.
According to the indictment, Young laundered the proceeds of his fraud by, among other things, stealing approximately $1.9 million of an investors’ funds and using these funds to purchase his luxury home in Palm Beach, Florida.