Chicago man gets 5 years in federal prison for Ponzi scheme - New York News

Chicago man gets 5 years in federal prison for Ponzi scheme

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CHICAGO (Sun-Times Media Wire) -

A Chicago man was sentenced to five years in prison last week for a Ponzi scheme that scammed more than $1.5 million from nearly 20 people.

Christopher Varlesi, 54, was sentenced to five years and ordered to pay about $638,000 in restitution, according to a release from the U.S. Attorney's office. Varlesi pleaded guilty in December 2012 to wire fraud and was sentenced May 2.

Varlesi operated Gold Coast Futures and Forex, a Ponzi scheme company, according to the U.S. Attorney's office. He obtained more than $1.5 million from 18 investors between July 2008 and January 2012, but neither Varlesi nor Gold Coast had a license to trade.

He traded only a small portion of the money he received from investors and spent more than $120,000 on rent for an apartment in the Trump International Hotel & Tower, and used the rest to make Ponzi-type payments to other investors, the U.S. Attorney's office said.

Varlesi told investors -- including family and friends -- he was trading gold, commodity futures and foreign currency, according to prosecutors. He hid the scam by guaranteeing a profit and providing false notes promising the entire return plus 5 percent to 7.5 percent interest.

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