Man posing as experienced stock trader pocketed over $200K of investor’s money, feds say

·3 min read
Scott Sharpe/ssharpe@newsobserver.com

A man posing as an experienced stock trader is accused of pocketing nearly a quarter million of an investor’s money for his personal use and making “poor” investment decisions with much of the rest.

Alongside stealing $224,500, Gonzalo Ortiz also controlled, in total, nearly $600,000 of the victim’s money, losing a major amount to trades that weren’t profitable despite his assurances otherwise in the scheme that took place between 2015 and 2017, federal officials in New York said in a news release.

With the money he kept for himself, Ortiz used it for purchases including food, clothes and car payments, officials said. Ortiz pleaded guilty “to investment adviser fraud in connection with a scheme to defraud an investor” on Nov. 29.

He “masqueraded as an experienced stock trader who could substantially increase the victim’s savings,” Breon Peace, the attorney for New York’s Eastern District, said in a statement.

Ortiz, of Hackensack, New Jersey, convinced the victim, referred to as “John Doe” in court documents obtained by McClatchy News, to hand over control of about $565,000 to invest in securities.

The “fraudulent scheme” began in April 2015, when Ortiz told the investor that he “was a successful stock trader and had made profits for other individuals by trading stocks on their behalf,” according to court documents.

He offered to manage John Doe’s money, promising a return of 50% each year.

In May 2015, Ortiz reportedly emailed the victim and pointed out certain securities that he said he would invest the victim’s money into.

He emailed the victim, saying “the possibilities are very good and although it seems to be too good to be true, in the position I am I can say that it is for real,” court documents reveal. Then, they entered into a written agreement, which authorized Ortiz to invest $100,000 of John Doe’s money that would be repaid by Ortiz within a year.

Ortiz also promised at least a 50% return on the first $100,000 investment, court documents said, and assured any gains up to $100,000 from trading the funds would be returned to the victim.

However, Ortiz is accused of stealing roughly $25,000 of the $100,000 investment, transferring it to his JPMorgan Chase bank account and spending almost $10,000 on car payments, clothes and food.

The scheme continued with Ortiz and the victim entering into written agreements for second and third investments, officials said.

In late 2016, Ortiz “falsely told” John Doe he had lost the first three investments, “totaling $400,000 through trading,” court documents state.

But, officials said that Ortiz actually “failed to advise John Doe that he had stolen approximately $170,000 of those investments for personal use.”

As the scheme progressed, court documents said, about $224,500 of John Doe’s money was funneled for personal use by Ortiz, who also lost a portion of his money from trading losses.

“In reality, Ortiz made poor trading decisions,” the release said.

“Investment fraud schemes are all too common, often causing emotional trauma to those affected,” Michael J. Driscoll, the FBI assistant director-in-charge, said in a statement.

Ortiz faces up to five years in prison and a maximum fine of $10,000, court documents show.

He has agreed to pay back the $224,5000 in restitution.

The news release and court documents obtained by McClatchy News did not include a sentencing date for Ortiz.

McClatchy News has reached out to Ortiz’s attorney and the U.S. Attorney’s Office for further comment.

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