Description: St. Paul, MN - Big Island Capital Fraudster Sentenced To 110 Months In Prison For Million Dollar Ponzi Scheme
Jeremy Richard Lundin, 31, to 110 months in prison for operating a Ponzi scheme through which he stole more than $1 million from individual investors. LUNDIN, who pleaded guilty on September 22, 2017, was sentenced today before Judge Wilhelmina M. Wright in U.S. District Court in Saint Paul, Minn. In addressing LUNDIN’S conduct, Judge Wright stated, “You did not steal from your victims because you needed money … you stole money because you wanted to maintain a lavish lifestyle without earning it. Your victims earned their money, and you stole it. You used their money to buy vacations, clothes, vehicles, a boat, for yourself. Apparently you decided you deserved their money more than they did.”
Assistant U.S. Attorney Amber Brennan said, “Jeremy Lundin had a life that a lot of people dream of, a middle class life. But, he wanted things he could not afford, so he stole from people who had saved money for their retirement and to help their kids go to college. These are people who wanted to give their kids the same opportunities that Lundin himself had. And, he stole from them for no reason other than to live a lavish lifestyle.”
“When fraudsters like Jeremy Lundin take advantage of honest citizens who are simply looking to invest their hard-earned savings and retirement funds for a better life - it’s not only shameful, but devastating,” said Acting Special Agent in Charge Hubbard Burgess of IRS Criminal Investigation, St. Paul Field Office. “Today's sentencing demonstrates how federal law enforcement works together to help stop the criminal behavior of those who prey on innocent investors in order to enrich themselves.”
“Postal Inspectors take very seriously their mission to deter the illegal use of the mails for any criminal activity,” said Acting Postal Inspector in Charge, Dana Carter. “We are committed to working together with our law enforcement partners to identify, investigate and bring to justice those who would attempt to mask their criminal activity through the use of the mail. Today’s sentencing should send a clear message to those individuals who are contemplating using the mails for their schemes to defraud, don’t do it.”
“To appear legitimate, Lundin used a slick sales pitch and phony documents to steal people’s life savings. His sole objective was to indulge his own extravagant lifestyle,” said Minnesota Commerce Commissioner Jessica Looman. “The Commerce Fraud Bureau is committed to investigating and stopping fraud in Minnesota. We hope that the sentence received by Lundin will deter others from committing fraud in our state.”
According to the defendant’s guilty plea, from approximately December 2014 until May 2017, LUNDIN claimed that he conducted “options trading” through his company Big Island Capital. LUNDIN worked through a network of associates and friends to solicit investors to invest with Big Island Capital by promising those potential investors exponential growth through options trading. LUNDIN solicited more than $1 million from at least 51 investors, but instead of using the funds for options trading, LUNDIN spent investors’ money to fund his and his wife’s lavish lifestyle.
According to the defendant’s guilty plea, as part of the scheme, LUNDIN provided victim investors with written materials relating to his purported investment strategy. Through these materials, LUNDIN claimed that the goal of Big Island Capital was to “generate profits with options trading” and that while he could not “guarantee” an exact percent, he would “shoot for” returns of between 40 percent and 80 percent. LUNDIN also entered into contract agreements with victim investors. These agreements, titled, “Big Island Capital Investment Advisory Agreement,” purported that the assets of Big Island’s account would be held for safekeeping in a brokerage account. LUNDIN regularly represented that the value of the account was several hundred thousand dollars. For example, “Welcome Packet” materials LUNDIN sent to a new victim investor on November 24, 2015, claimed that the firm’s capital was then $730,000 when, in reality, LUNDIN did not even open the brokerage account until December 21, 2015.
According to the defendant’s guilty plea, in order to appear legitimate and promote his scheme, LUNDIN created phony account statements. He also provided victim investors with online access to fictitious quarterly statements and purportedly “up to date” information about the rate of growth and the market value of the accounts, which commonly and falsely showed double-digit gains. As part of the scheme, LUNDIN directed his victim investors to make their checks payable to “Big Island Capital,” he would then deposit those checks into a bank account he had established in the company’s name. Between May 2015 and May 2017, at least $992,000 was deposited into that account. During roughly the same time period, however, LUNDIN transferred $933,950 from the business account directly into his and his wife’s personal checking account. LUNDIN and his wife used the majority of those investor funds on personal expenses including travel, luxury automobiles, a boat, jewelry, retail purchases, and more than $366,000 in credit card payments.
This case is the result of an investigation conducted by the Criminal Investigation Division of the IRS, Federal Bureau of Investigation, United States Postal Inspection Service, and Minnesota Department of Commerce Fraud Bureau.
Assistant United States Attorney Amber M. Brennan prosecuted the case.