Jun 17, 2009 10:32 pm US/Central
Ponzi Scheme Suspect Faces Federal Charges
David Hernandez Is Money Man Behind Mike North's Chicago Sports Webio
DOWNERS GROVE, Ill. (CBS) ―
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David Hernandez, the money man behind Mike North's Chicago Sports Webio accused of running a Ponzi scheme, has contacted his family after being reported missing.
Downers Grove Police
Where is David Hernandez? The FBI wants to know. A federal arrest warrant for the money man behind sports host Mike North's web business was issued Wednesday, but he's still nowhere to be found. CBS 2's Dana Kozlov talked with the Norths tonight about the fallout from this scandal.
The federal complaint against David Hernandez, 48, lays out quite a case, alleging he'd been bilking investors from potentially 12 states of their money for more than a year; using funds to buy things like expensive cars for his family.
"I feel like Mike and I are victims also just like all those people that got taken for their money," BeBe North said.
Mike North and his wife BeBe are on the defensive tonight; angry and hurt by suggestions they should have known that David Hernandez, their business partner and co-founder of Chicago Sports Webio, may have been stealing people's money.
When asked if they had any indication of what Hernandez was up to, BeBe said, "None. We wouldn't have done anything with him if we had."
Hernandez is now a fugitive. He is wanted by the FBI for allegedly running a Ponzi scheme through his businesses NextStep Financial and NextStep Medical Staffing in Chicago.
"The investigation into exactly how many victims there are and how much money might have been taken is still ongoing," said Ross Rice, FBI.
Hernandez was also the main sponsor of North's Comcast show and paid Webio's 18 or so employees. The Norths say Comcast was paid months in advance, and Webio employees paid regularly until a few weeks ago. They say that's when the red flags went up.
"Actually Mike and I were hounding David by e-mails and saying, 'You can't do this. What's going on? You can't treat people like this. This isn't how we set things up.' He just ignored us," BeBe said.
It turns out, Hernandez was convicted for wire fraud in 1998 while president of Columbia Bank. And that's not all. His NextStep financial website states he was a John Marshall Law School graduate, a lie; that he was registered with the S.E.C., a lie; and that investors' money was privately insured, another lie.
"He even told us that he had been married for all these years to his wife and everything, that's not even true," BeBe said. "Really good liar."
If convicted, Hernandez faces up to 20 years in prison.
On Monday evening, Hernandez's wife reported him missing when he failed to return home, said Downers Grove Police Sgt. David Bormann.
Hernandez had called his wife Monday afternoon and made statements to her "referencing his well being," said Bormann, who declined to be more specific.
"It was enough to cause alarm with his wife," Bormann said.
So could Hernandez have skipped the country? It's possible, because he wasn't a fugitive until the Feds issued an arrest warrant late Wednesday morning. There were reports he called his wife to say he was in a Downers Grove hotel but authorities don't buy it.
The missing persons drama is independent of the Ponzi scheme investigation, Bormann said.
Now the Norths acknowledge they got their mortgage 14 years ago from Hernandez's former bank before he was convicted, but say they had no dealings with him until this recent venture and didn't know he was a convicted felon. And they say he deserves to be punished.
Hernandez is driving an olive-colored Ford Explorer with license plate 9656625. He is described as 5-feet 10-inches tall and weighing 205 pounds. He was wearing a burgundy shirt and khaki pants.
CBS 2's Dana Kozlov and the STNG Wire contributed to this report.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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