Related Federal Cases
Holloway, Wire Fraud, Utah 2014
A California investment manager has been found guilty in federal court in Salt Lake City, Utah, for his role in a $33 million investment fraud scheme.
Robert L. Holloway, 55, was found guilty after a seven-day trial by a federal jury in the District of Utah of four counts of wire fraud and one count of making and subscribing a false income tax return.
Holloway operated an investment entity called US Ventures LC, which was founded in 1999. The company was led by Holloway as the chief executive officer and managing partner. From October 2005 until at least April 2007, Holloway recruited investors for US Ventures by making false representations about the company.
He claimed that US Ventures used proprietary trading software that was consistently profitable, and that the company generated returns of 0.8 percent per trading day. Holloway also promised that US Ventures would retain a 30 percent share of investors’ profits as a management fee.
However, evidence presented at trial showed that between October 2005 and April 2007, contrary to the returns shown on the reports Holloway distributed, US Ventures lost more than $10 million in trading. The “profit” figures on the investor reports were entirely fabricated.
Holloway and US Ventures also made “profit distributions” to investors that consisted of funds solicited from new investors, not actual profits. The company raised more than $33 million from investors for its trading activities.
Additionally, Holloway misappropriated investors’ funds for personal expenses, including supporting his then-wife’s eBay business and purchasing hundreds of thousands of dollars of jewelry. During 2006 alone, Holloway diverted more than $1.2 million in investor funds to a “business” account that Holloway used for personal expenses.
U.S. District Court Judge Robert J. Shelby has set sentencing for October 20, 2014. Judge Shelby ordered Holloway to be taken into custody following the jury verdict.
The case was investigated by the FBI’s Salt Lake City Field Office and the IRS-CI’s Las Vegas Field Office. The case was prosecuted by Assistant U.S. Attorney Jason R. Burt from the U.S. Attorney’s Office in Utah and Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section.
The Commodity Futures Trading Commission and the Securities and Exchange Commission assisted in the investigation.
Key Facts
- State: Utah
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release ↗
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