Danbury Resident Admits Stealing Nearly 300,000 from Investors in Fraud Scheme
Deirdre M. Daly, United States Attorney for the District of Connecticut, announced that ALEXANDER BERGEN, 22 of Danbury, waived his right to indictment and pleaded guilty today in Hartford federal court to stealing approximately $300,000 from individuals who invested in his Internet business.
According to court documents and statements made in court, BERGEN operated CT Wholesale, a company that sold electronic equipment and other items by buying the product for a cheaper price and then reselling those products to the customer at a higher price. Beginning in approximately 2013, BERGEN began to accept investment funds from investors who were promised a return on their investments. BERGEN represented to the investors that he would use their investment funds solely to purchase products for resale to his customers and that the investors would receive their principal investment back with a profit in a specified period of time. In some cases, BERGEN entered into written investment agreements with investors in which he expressly represented that the investment funds provided by the investor would be used solely to purchase products.
BERGEN received a total of more than $300,000 from approximately 10 investors. Despite representing to the investors that all of their funds would be used solely to purchase products for resale by CT Wholesale, BERGEN did not use these funds solely to purchase products. In 2013, BERGEN used approximately $150,000 of the investors’ money to pay for his personal credit card bills which included personal expenses for fine dining, travel, and to shop at high-end retail stores.
BERGEN returned less than $40,000 in funds to his investors. Collectively, the investors lost approximately $286,000 of the investment funds they provided to BERGEN.
BERGEN pleaded guilty to one count of interstate transportation of money obtained by fraud. He is scheduled to be sentenced by U.S. District Judge Vanessa L. Bryant on October 14, 2015, at which time he faces a maximum term of imprisonment of 10 years, a maximum fine of more than $500,000 and an order of restitution.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Senior Litigation Counsel Richard J. Schechter.