Date: 01-19-2016

Case Style: United States of America v. Steven Wessel a/k/a "Wes Wessels"

Case Number: 1:14-cr-00532-LAP

Judge: Loretta A. Preska

Court: United States District Court for the Southern District of New York (New York County)

Plaintiff's Attorney: Damian Williams

Defendant's Attorney: Peggy Cross-Goldenberg and Robert M. Baum - FPD

Description: New York, NY - Investment Adviser Sentenced In Manhattan Federal Court

Steven Wessel, a/k/a “Wes Wessels,” was sentenced in Manhattan federal court to 55 months in prison for securities fraud, wire fraud, and aggravated identity theft. WESSEL engaged in a scheme to defraud two investors and unlawfully use the identity of another person in furtherance of that scheme to defraud. WESSEL pled guilty on April 23, 2015, and was sentenced by Chief United States District Judge Loretta A. Preska.

Manhattan U.S. Attorney Preet Bharara said: “Steven Wessel lied to investors who trusted him with their money, spending almost all of it to pay for his own personal expenditures.”

According to the allegations contained in the Superseding Indictment, the underlying criminal Complaint unsealed on June 24, 2014, and statements made during court proceedings:

From at least June 2013 through April 2014, WESSEL ran a fraudulent investment scheme. WESSEL, who claimed to be the Chairman and Executive Managing Member of Steeplechase USA, LLC (“Steeplechase USA”), located in New York, New York, represented to an investor (“Investor A”) that Steeplechase USA was in the business of trading securities. WESSEL personally solicited $200,000 from Investor A on the understanding that the funds would be solely invested in securities.

Contrary to WESSEL’s promise to invest Investor A’s funds in securities, WESSEL used substantially all of Investor A’s money for his own personal benefit, including for cash withdrawals and personal expenses, such as the payment of $25,000 toward a restitution obligation from a prior judgment of conviction. WESSEL did not tell Investor A about this misappropriation. Instead, WESSEL falsely represented to Investor A that his $200,000 investment had gained tens of thousands of dollars and that Steeplechase USA’s portfolio had gained approximately 167% in 2013. Furthermore, in connection with this fraudulent scheme, WESSEL sent Investor A multiple emails that purported to come from Steeplechase USA’s accountant (“Accountant 1”). In those emails, WESSEL, pretending to be Accountant 1 without Accountant 1’s knowledge or permission, made multiple false statements concerning Investor A’s investment with Steeplechase USA.

When Investor A requested to withdraw his funds from Steeplechase USA, WESSEL solicited a $550,000 loan from a second investor (“Investor B”). WESSEL falsely represented that he would use Investor B’s money to provide financing for a commercial real estate project. To induce Investor B to lend him money, WESSEL, among other things, created and sent a fabricated email to Investor B. The fabricated email purported to be from a bank and made it appear as if the real estate project were legitimate.

Contrary to WESSEL’s promise to Investor B, WESSEL used substantially all of Investor B’s money for his own benefit, including to pay $251,000 to Investor A – money that, according to WESSEL, represented Investor A’s initial $200,000 investment and $51,000 in trading profits.

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In addition to the prison sentence, WESSEL, 58, of New York, New York, was sentenced to three years of supervised release. The Court further ordered WESSEL to pay $499,000 in restitution.

Mr. Bharara praised the work of the Criminal Investigators of the United States Attorney’s Office, who investigated this case.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visit www.StopFraud.gov.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force.

Outcome: Defendant was sentenced to 55 months in prison.

Plaintiff's Experts:

Defendant's Experts:

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