Texas Investment Manager Pleads Guilty in Utah to Role in $72 Million Fraud Scheme
|U.S. Department of Justice August 22, 2013|
WASHINGTON—Robert Andres, 62, an investment manager based in Houston, pleaded guilty yesterday in federal court in Salt Lake City for his role in a $72 million investment fraud scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney David B. Barlow for the District of Utah, Special Agent in Charge Mary Rook of the FBI’s Salt Lake City Field Office, and Special Agent in Charge Paul A. Camacho of the Internal Revenue Service-Criminal Investigation (IRS-CI) Las Vegas Field Office made the announcement.
Andres pleaded guilty on August 21, 2013, to one count of wire fraud. He faces a maximum penalty of 20 years in prison and a fine of $250,000 when he is sentenced on January 7, 2014.
According to the indictment and other publicly filed documents, Andres operated Winsome Investment Trust, an investment entity, and served as its sole manager, attorney and trustee. From October 2005 until at least January 2011, Andres recruited investors for Winsome by misrepresenting Winsome’s assets and asset allocation and the way in which funds were invested.
Between October 2005 and April 2007, Andres raised more than $39 million from Winsome investors by disseminating false and misleading Winsome balance sheets and by representing to investors that Andres would invest all of their funds in a trading program or a mostly automated trading business.
According to publicly filed documents, between April 2007 and January 2011, Andres used false and misleading information to raise an additional $32 million from new investors. Furthermore, Andres failed to disclose that new investors’ funds would be used to pay earlier investors. In addition, Andres used new investor funds to make purported “profit” payments to earlier investors to create the false impression that Winsome was profitable. During this period, Andres misappropriated approximately $2.2 million in investor proceeds for personal use, including hotel bills and living expenses.
This case was investigated by the FBI’s Salt Lake City Field Office and IRS-CI Las Vegas Field Office. The department thanks the Commodity Futures Trading Commission and the Securities and Exchange Commission for their assistance in the investigation. The case is being prosecuted by Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Jason R. Burt and Mark Y. Hirata for the District of Utah.