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Suburban Investment Advisor Indicted for Allegedly Defrauding At Least 10 Investors of $2.9 Million

CHICAGO–(ENEWSPF)–April 25, 2014.  A west suburban investment advisor was indicted on federal charges alleging that he fraudulently obtained approximately $2.9 million from at least 10 investors and misused the funds in a Ponzi-type scheme. The defendant, JOSEPH HENNESSY, co-owned and co-operated the now-defunct Resource Planning Group, Inc., formerly a registered investment advisor with the U.S. Securities and Exchange Commission.

Hennessy, 53, of Western Springs, was charged with seven counts of wire fraud in an indictment returned by a federal grand jury on Wednesday and announced today. He is scheduled to be arraigned next Wednesday in U.S. District Court in Chicago.

The indictment also seeks forfeiture of at least $2.9 million in alleged fraud proceeds.

According to the indictment, Hennessy and Resource Planning Group formed and operated the Midwest Opportunity Fund, a private equity fund that purported to invest in small to medium-sized companies based in the Midwest. Between 2007 and 2012, Hennessy allegedly made false statements to investors and used their investments to return principal and pay interest to earlier investors, all of which he concealed and intentionally failed to disclose to both new and existing investors. In fraudulently obtaining and retaining these funds, Hennessy falsely represented the use of the funds, the repayment of the investors’ principal, the expected return on investments ―which he claimed would yield between 10 and 15 percent a year ― the risks involved in the investment, and the status of the investments, the indictment adds.

Hennessy also falsely represented that he personally guaranteed investments in the fund, knowing that he did not have sufficient assets to repay investors, and he misappropriated funds from the individual retirement accounts of certain clients to pay existing investors in the Midwest Opportunity Fund, the indictment alleges.

Each count of wire fraud carries a maximum penalty of 20 years in prison and a $250,000 fine, and restitution is mandatory. If convicted, the court must impose a reasonable sentence under federal statutes and the advisory United States Sentencing Guidelines.

The indictment was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois; Robert J. Holley, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation; and Tony Gómez, Inspector-in-Charge of the U.S. Postal Inspection Service in Chicago. They thanked the U.S. Securities and Exchange Commission for its assistance. The government is being represented by Assistant U.S. Attorney Sunil Harjani.

The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Source: justice.gov

 

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