Oct 29, 2009 1:05 pm US/Central
Suburban Man Charged In $28M Ponzi Scheme
CHICAGO (CBS) ―
A west suburban man has been charged with setting up a $28 million Ponzi scheme that caused at least 60 victims to lose a combined $4.5 million.
Matthew Scott, 50, of Elmhurst, has been charged with mail fraud, according to the U.S. Attorney's office in Chicago. Scott was president and sole owner of a printer repair company known as Gelso, Inc., located in Northlake.
Between early 2000 and March 2009, Scott allegedly convinced his victims to invest $28 million in a business that he falsely claimed had bought high-speed commercial printers – valued at more than $100,000 – that were re-sold for substantial profit.
But Scott and his company did not purchase any printers and instead, prosecutors claim he fabricated purchase orders and other documents and, throughout the scheme, used the money from new investors to pay off earlier investors.
According to the charges, Scott also obtained a $300,000 loan from Hinsdale Bank and Trust Co. by claiming the loan would be secured by a printer which was being sold to a third party and by providing fraudulent documents as proof of the printer sale, according to the charges.
If convicted of mail fraud, Scott could be sentenced to up to 20 years in prison and face a fine of up to twice the loss to any victim or twice his own personal gain from the alleged Ponzi scheme. Scott will be arraigned at a date yet to be determined.
The Sun-Times Media Wire contributed to this report.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
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