Seattle Man Charged with Wire Fraud for Ponzi Scheme Involving Fake Investments in Peru
Former Bank Employee Preyed on Family, Friends, and Co-Workers to Fund Lavish Lifestyle

A former bank employee who marketed real estate investment opportunities in Peru, is now charged with five counts of wire fraud for what was a classic Ponzi scheme. JOSE L. NINO DE GUZMAN, Jr., 28, of Seattle, Washington was arrested this morning in Los Angeles, California and will make his initial appearance there before being returned to the Western District of Washington. DE GUZMAN, Jr. ran NDG Investment Group, LLC from 2006 until 2009, when the Washington State Department of Financial Institutions issued a cease and desist order concerning his fraudulent sales of investment opportunities. According to the criminal complaint filed in the case, DE GUZMAN, Jr. raised more than $20 million from 160 investors for real estate investments in Peru. However, the investments described to investors did not occur.

According to records filed in the case, DE GUZMAN, Jr. was a 23-year-old graduate of the University of Washington when he founded NDG Investment Group, LLC. DE GUZMAN, Jr. had been employed by U.S. Bank, until he started his company in September 2006. DE GUZMAN, Jr. represented to investors that he had a track record of successful development in Peru, that his firm had a partnership with an established company in Peru, that the investments were secured by real property in Peru, and that investors would get a high rate of return on their investments when the development projects were complete. In fact, investors’ money was not used for the purchase of real property but went to fund DE GUZMAN, Jr.’s business and lavish lifestyle. Investor money was allegedly used to purchase a $1.8 million home, a $365,000 diamond ring, a $600,000 yacht, a $250,000 suite at Qwest Field for Seahawks games, and a $200,000 Bentley automobile. As in a classic Ponzi scheme, some investor money went to pay off previous investors to continue the illusion that DE GUZMAN, Jr. was a successful developer.

DE GUZMAN, Jr. pitched his investment opportunity at expensive downtown clubs and hotels. Some of the investors were the parents or friends of people DE GUZMAN, Jr. worked with at U.S. Bank or hired to work for his company. Some of those employees first reported DE GUZMAN, Jr. to regulators when they became aware of the fraud.

Wire fraud is punishable by up to 20 years in prison. The charges contained in the complaint are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

The case is being investigated by the Washington State Department of Financial Institutions (DFI), the Internal Revenue Service Criminal Investigations (IRS-CI) and the FBI. The case is being prosecuted by Assistant United States Attorneys Aravind Swaminathan and Tessa Gorman, and by Special Assistant United States Attorney Robert Kondrat. Mr. Kondrat is an attorney with the Washington State Department of Financial Institutions, specially designated to prosecute securities fraud cases in federal court.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.