With friends like these…
A Litchfield County investment manager has been sentenced to more than seven years in federal prison for operating a multi-million dollar fraud scheme that swindled friends and family members, including victims in both Connecticut and the Chicago area, where he was sentenced Dec. 19.
Alvin Wilkinson, the founder of Chicago Index Partners LP and Wilkinson Financial Opportunity Fund LP, both based in Sharon, Conn., persuaded at least 30 individuals, many of whom were friends, family members and colleagues, to invest some $13.5 million in his funds. Wilkinson, who previously served as a director at the Chicago Board Options Exchange, claimed he would trade a portfolio of financial instruments on their behalf, including options and futures, and that his trading strategy made money regardless of market conditions.
In reality, Wilkinson did not maintain trading accounts for the funds, and he did not use investor funds to trade in options and futures. Wilkinson often used investor funds to cover personal expenses, and he later used the money to pay earlier investors through Ponzi-type payments. His fraud scheme began in 1999 and continued until 2016.
Wilkinson, 61, of Sharon, Conn., pleaded guilty earlier this year to one count of wire fraud. U.S. District Judge Sharon Johnson Coleman sentenced Wilkinson to seven years and four months in prison, and she ordered him to pay $8.032 million in restitution to his victims.
John R. Lausch Jr., United States Attorney for the Northern District of Illinois; and Emmerson Buie Jr., special agent-in-charge of the Chicago office of the FBI, announced the sentence. The Commodity Futures Trading Commission, which filed a civil enforcement lawsuit against Wilkinson, assisted in the government’s investigation.
“Defendant was a fiduciary who was supposed to act in investors’ best interest at all times,” Assistant U.S. Attorney Nicholas J. Eichenseer argued in the government’s sentencing memorandum. “While defendant reassured investors with lie after lie, he was living lavishly courtesy of the millions he was secretly diverting to himself.”
According to the original indictment handed down in January 2017, Wilkinson used his investors’ funds to cover personal expenses that included a $7,000 monthly mortgage payment on his Sharon home, rent on a San Juan, Puerto Rico apartment, a new automobile and pool-cleaning services.
