Pennsylvania Man Sentenced to 70 Months in Prison for Multi-Million-Dollar Investment Fraud

CAMDEN—William Graulich, IV, purported managing partner of iVest International Holdings Inc., was sentenced today to 70 months in prison for conspiring to solicit victims to invest millions of dollars based on his false promises, U.S. Attorney Paul J. Fishman announced.

Graulich, 55, of Henryville, Pennsylvaia, previously pleaded guilty before U.S. District Judge Robert B. Kugler to an information charging him with wire fraud conspiracy for scheming to perpetrate a multi-million-dollar investment fraud using interstate wires. Judge Kugler imposed the sentence today in Camden federal court.

According to documents filed in this case and statements made in court:

Graulich and his co-conspirators represented that they had an “exclusive” investment platform available by invitation only that had previously been open only to those able to invest at least $100 million. Graulich and his co-conspirators pitched the investment platform to a victim identified in the information as D.G. and to others, stating that any investment would be held in a non-depletion attorney account and would not be at risk. Investors were told the money in this account would be used as collateral to obtain a line of credit, which would be used to trade financial instruments, including medium-term notes and standby letters of credit. Graulich and his co-conspirators promised weekly returns of 22 percent.

Based on Graulich’s false representations and willingness to waive the purported $100 million minimum investment requirement, D.G. invested $4.4 million, wiring $2.8 million in August 2008 and $1.6 million in November 2008 to a JPMorgan Chase Bank account maintained by Graulich in Morristown, New Jersey. D.G. wired the money pursuant to an executed joint venture agreement D.G. had with Graulich, which contained numerous false representations.

From December 2008 through January 2009, Graulich paid D.G. approximately $1 million in “returns,” which actually consisted of money from D.G.’s own investment, before discontinuing payments altogether. In addition to paying phony returns back to D.G., Graulich used some of the investor’s money to pay for his personal expenses, including $57,244 for the purchase of a Jaguar automobile, $100,000 for tax payments, $10,000 for mortgage payments, $25,000 for legal expenses, and $100,000 for tickets to professional baseball games.

In addition to the prison term, Judge Kugler sentenced Graulich to three years of supervised release and ordered him to pay restitution of $3.6 million.

U.S. Attorney Fishman praised special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; and postal inspectors of the U.S. Postal Inspection Service, under the direction of Postal Inspector in Charge Philip R. Bartlett, for their work in the investigation leading to today’s sentence. He also thanked the U.S. Securities and Exchange Commission’s Philadelphia Regional Office, under the leadership of Regional Director Daniel Hawke.

The government is represented by Assistant U.S. Attorney Jenny R. Kramer of the U.S. Attorney’s Office Economic Crimes Unit in Newark.