Posted by East of Edens on June 24, 2009 at 08:24:38:
Divorce reportedly looms for Ponzi scheme suspect
Steve Miller Reporting - Posted: Wednesday, 24 June 2009 6:36AM
CHICAGO (WBBM/AP) - As former Web radio executive David Hernandez lies in a Downstate hospital under police guard, recovering from an apparent suicide attempt, there are indications his wife is preparing to divorce him.
Nothing's been filed yet, but Tim Martin, the attorney for David Hernandez' wife Gina, implied that Gina Hernandez is on the verge of filing for divorce.
"I would expect that. That has not been done yet but I would certainly say that that's in the foreseeable future."
Martin says his client Gina Hernandez led a conservative life with David Hernandez.
"Up until the last year, when he bought two new cars, a couple of pieces of jewelry from the Tiffany store."
David Hernandez faces federal charges of running a Ponzi scheme.
He describes Gina Hernandez as "totally shocked" by the Ponzi scheme charges against her husband.
The U.S. Securities and Exchange Commission has filed a civil suit against Hernandez. Gina Hernandez is named in that suit.
Her attorney says she is cooperating with the government.
Normal, Ill. Police Sergeant Paul Smith says Hernandez will be placed behind bars at some point.
"It's a bizarre situation where this guy is an extremely clever con artist and he's duped a lot of people, from Mike North to Chet Coppock to Gina Hernandez," Martin said.
Gina and David Hernandez have been married since February of 2001.
A Ponzi scheme is an investment operation that pays returns to investors from their own money or from money paid by subsequent investors rather than from any actual profit earned.
Last week, federal regulators accused Hernandez of running an $11 million Ponzi scheme.
Hernandez was accused in a civil lawsuit filed by the U.S. Securities and Exchange Commission of promising investors in Next Step Financial Services Inc. returns of 10 percent to 16 percent but paying them with money coming in from new investors.
"Hernandez bilked investors out of funds that he led them to believe were being invested properly and safely," said Merri Jo Gillette, director of the SEC's Chicago regional office. Instead, he was paying them "in Ponzi-like fashion," she said.
She said he was also using the money for personal expenses such as cars, jewelry and a piano, to pay his mortgage and to launch "Chicago Sports Webio," a Web site featuring sports figures and reporters.
Hernandez, 48, was not charged with any criminal violations. But the SEC said that in 1998 he had been convicted of wire fraud arising from previous employment at a bank.
The complaint said that beginning in February 2008, Hernandez, of Downers Grove, solicited funds from at least 100 investors in at least 12 states through Next Step Financial Services. It said he misrepresented the company as a successful business that invested in payday loan stores when in fact it was out of business. It also said he lied to investors when he said their investments were insured.