Owner of California Investment Firm Sentenced for Fraud
Investors Defrauded of More Than $6 Million

SAN DIEGO—Scott Bottolfson was sentenced today to serve 60 months in custody based upon his guilty plea to one count of wire fraud for defrauding approximately 30 investors of more than $6 million, announced U.S. Attorney for the Southern District of California Laura E. Duffy. U.S. District Court Judge Jeffrey T. Miller also ordered Bottolfson to pay $6,813,462.51 in restitution to the victims of his scheme and to serve three years of supervised release following his release from prison. Bottolfson entered his guilty plea in November 2010.

According to court documents and Bottolfson’s admissions at the time of his guilty plea, between September 2001 and July 2010, Bottolfson solicited and obtained money from investors by falsely offering guaranteed rates of return of 18-20 percent for investments and falsely claiming that his company, Increase Investments Inc., was regulated by the National Futures Association (NFA). In fact, Bottolfson used as much as 50 percent of investor funds for personal expenditures, including payments for his residence and personal vehicles. Bottolfson also admitted that he used investor funds to execute a Ponzi scheme, whereby he gave new investor funds to previous investors and falsely represented these funds as investment returns.

This case was brought in coordination with the President’s Financial Fraud Enforcement Task Force, which includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes. The task force is also making the public aware of resources available to protect against these types of fraud and how to report fraud when it occurs. To learn more about investment scams, how to take steps to protect yourself from scams or how to report investment fraud if you believe you have been victimized, the task force recommends that you visit its website, www.StopFraud.gov.

This case was investigated by the FBI, working cooperatively with the Commodities Futures Trading Commission and the NFA and prosecuted in federal court in San Diego by Assistant U.S. Attorney Christopher Tenorio.