Saratoga Attorney Charged with Investment Fraud

SAN JOSE, CA—A Saratoga attorney was arrested and arraigned this morning on 12 counts of wire fraud, United States Attorney Joseph P. Russoniello announced.

According to an indictment, which was filed in San Jose federal district court yesterday and unsealed this morning, David Boyer Prince, 46, carried out an investment fraud scheme from August 2005 to January 2007. Prince was an attorney licensed to practice in California, who resided and practiced in Saratoga, Calif. Prince and others told potential investors that they were investing in three investment entities—the Leopard Fund, MJE Invest! and Dawnstar Alliance.

The indictment alleges that Prince and others induced victims to invest by falsely promising them that their principal was guaranteed and that they would receive rates of return as high as 5 to 25 percent a month. In reality, Prince did not handle investors’ money in a manner that would guarantee their principal, nor did he deliver investors the high rates of return he had promised.

The indictment also alleges that Prince and others falsely told investors that Prince’s investment funds had demonstrated above-market historical performance, were operated and managed by a professional traders with a long history of market success, and were in full compliance with SEC regulations. According to the indictment, Prince also represented to victim-investors that they should feel confident about the legality of his investment funds because he was an attorney.

According to the indictment, Prince raised a total of approximately $1,200,000 from more than 30 investors but failed to provide the vast majority of the investors with the interest they had been promised or repay their principal. Instead, Prince converted at least $220,000 of the investors’ funds for his personal use and into cash, transferred a net total of at least $68,000 to a foreign bank account, and squandered much of the remaining funds day-trading and on purposes unrelated to his victims’ supposed “investments.”

In addition to 12 counts of wire fraud, the indictment against Prince also contains a forfeiture allegation.

The Federal Bureau of Investigation arrested Prince this morning in Saratoga, Calif., pursuant to a sealed arrest warrant. Prince made his initial appearance in a federal court in San Jose this morning before United States Magistrate Judge Patricia V. Trumbull. At that initial appearance, the government requested that Prince be detained as a serious risk of flight. Magistrate Judge Trumbull ordered Prince detained pending a full bail study. Prince is scheduled to return to court on Tuesday at 1:30 p.m., when he will appear before Magistrate Judge Trumbull for a detention hearing.

The maximum statutory penalty for each count of wire fraud in violation of Title 18, United States Code, Section 1343, is 20 years in prison and a fine of $250,000, plus restitution. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Joseph Fazioli is the Assistant United States Attorney who is prosecuting the case with the assistance of Legal Assistants Kamille Singh and Jeanne Carstensen. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Please note: An Indictment contains only allegations against an individual and, as with all defendants, Prince must be presumed innocent unless and until convicted.

Further Information:

Case #: 10-00153 JF

A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.

Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.

Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.

All press inquiries to the U.S. Attorney’s Office should be directed to Jack Gillund at (415) 436-6599 or by e-mail at Jack.Gillund@usdoj.gov.