William J. Wise, Mastermind of Massive Ponzi Scheme, Pleads Guilty
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The CDs were issued by three different entities -- Millennium Bank, United Trust of Switzerland and Sterling Bank and Trust -- all of which, you guessed it, Wise, 62, controlled with a co-defendant allegedly acting as his right-hand person in running this plot.
The fraudulent CDs promised guaranteed rates of return that Wise later admitted he and his co-defendant falsely claimed were generated by profitable overseas investments, according to federal prosecutors.
Wise also confessed that he knew all along he was operating a Ponzi scheme where investors were guaranteed interest payments from later investor funds.
What's more, Wise said that in 2008 alone, he owed at least $1 million in taxes from his earnings on this Ponzi scheme, which he managed to dodge by various means, including by making interest payments on a private jet and paying for construction and furnishings on a large personal property in St. Vincent and the Grenadines.
Between January 2004 and March 2009, Wise and his co-defendant sold more than $129.5 million worth of bogus CDs to investors, causing those investors to suffer actual losses of more than $75 million, according to the U.S. Attorney's Office.
Wise pleaded guilty in federal court in San Francisco to one count of conspiracy to commit mail and wire fraud, 12 counts of mail fraud, three counts of wire fraud, one count of money laundering and one count of tax evasion.
"The fraudsters prey upon vulnerable victims, do not respect local or even state boundaries, and often loot the victims' life savings," said U.S. Attorney Melinda Haag.
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