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German sentenced to 8-1/2 yrs for $37 mln pyramid selling scam
STUTTGART, March 5 |
STUTTGART, March 5 (Reuters) - A German man has been convicted of running a pyramid selling scheme that duped investors out of at least $37 million dollars and sentenced to eight-and-a-half years in jail, a Mannheim court said.
Ulrich Felix Anton Engler was accused of using a Florida-based marketing company to lure investors between end-2004 and mid-2007, under the pretence of investing the cash on the New York Stock Exchange. In reality, he was running a pyramid selling or Ponzi scheme.
Prosecutors said they had evidence that 1,295 investors from Germany, Austria and Switzerland lost at least $37 million in the scheme run by Engler, who was arrested in Las Vegas in July 2012 and then extradited to Germany.
A pyramid or Ponzi scheme fails to make real investments which yield actual returns. A fraudster can keep up the appearance of delivering consistent returns by paying out cash to old investors by using funds from new investors.
A spokesman for the Mannheim court said Engler was convicted on Monday of two counts of fraud. He had agreed to plead guilty in exchange for a sentence of less than eight years and nine months.
An international arrest warrant was issued for Engler in 2007, but his whereabouts remained unknown until his arrest in Las Vegas. (Reporting By Hendrik Sackmann; Writing by Edward Taylor; Editing by Sophie Hares)
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