Posted by not a Big Fan on July 10, 2009 at 13:30:18:
Webio co-founder David Hernandez indicted for Ponzi scheme
July 10, 2009
BY NATASHA KORECKI Federal Courts Reporter
A federal grand jury has indicted businessman and alleged Ponzi schemer David J. Hernandez on charges that he scammed nearly 300 people out of $12 million.
Hernandez, who co-founded the now-defunct ChicagoSportsWebio.com, with popular broadcaster Mike North, allegedly carried out the scheme through his business, NextStep Financial Services, Inc., and several related companies.
Hernandez recently went on the lam and was found in Peoria. He was taken into federal custody after he was released from the hospital following a drug-induced suicide attempt, authorities said.
Hernandez faces four counts of mail fraud after prosecutors say he misled investors, promising them 10 to 16 percent returns on investments he never made, according to the indictment.
Hernandez also allegedly told investors their principal was protected through insurance — but it wasn’t, prosecutors say.
Hernandez is also accused of converting money from his investors for his own benefit, including to make "interest" payments to other NextStep investors, according to court papers.
The government wants to seize $3.5 million and two luxury automobiles from Hernandez, including a 2009 Audi and a 2007 Mercedes Benz ML350.
Hernandez 48, was reported missing June 15, just before federal charges were announced. He's also accused in a civil lawsuit filed by the U.S. Securities and Exchange Commission of bilking more than 100 investors out of nearly $12 million.