West Point grad charged in $30 mln US Ponzi scheme

WASHINGTON, March 29 | Mon Mar 29, 2010 11:56am EDT

WASHINGTON, March 29 (Reuters) - A West Point graduate who claimed his knowledge of physics allowed him to predict "with an uncanny degree of certainty" trends in the futures market was accused on Monday in Ohio of perpetrating a $30 million Ponzi scheme.

Federal prosecutors charged Cuyahoga Falls, Ohio, resident Enrique Villalba, 47, with one count of wire fraud for allegedly scamming 26 investors out of $29.7 million through the sale and purchase of futures contracts.

Villalba, who also has a law degree, is accused of promising investors returns of 8 to 12 percent by using a "Money Market Plus" methodology and by combining his knowledge of physics with a unique "momentum filter," prosecutors said.

The complaint also charged that Villalba did not put promised "stop" orders in place to prevent excessive losses and that he diverted millions of dollars in investor money to fund Rico Latte coffee shops in Ohio, purchase real estate and make payments to some investors.

A Ponzi scheme is one in which early investors are paid with the money of new clients.

Villalba's attorney could not immediately be reached for comment.

In addition to the criminal complaint, separate civil complaints were filed against Villalba on Monday by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.

The criminal case is U.S. v. Enrique F. Villalba, U.S. District Court for the Northern District of Ohio, No. 1:10-cr-00133. (Reporting by Dan Margolies, editing by Matthew Lewis)

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Comments (1)
dutchh wrote:
I’m a West Point Grad and this news is very disturbing. Assuming it’s true, I hope they throw the book at this Villalba. He’s a bum and shouldbe ashamed of himself. I have always tried to live by the motto of Duty , Honor, Country. This bum apparently went by a different motto and stole millions and millions of $$ from his investors. Unfortunately it happens at every major college and university. The best and the brightest on Wall Street came from the Harvards, Yales, and Princetons and they are a bunch of crooks and BUMS. I wish Holder would charge some of those crooks (Goldman, Merrill Lynch, Morgan Stanley, AIG etc. etc.) with larceny and fraud and throw them in jail. The entire country was adversely affected by those greedy scumbags on Wall Street. The stock market is a big Ponzi Scheme in my opinion.

Mar 30, 2010 6:39pm EDT  --  Report as abuse
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