Kevin Kyes, Ponzi Scheme, California 2018

Convicted Ponzi Scheme Mastermind Targeted Japanese Investors for $7 Million

A former South Bay resident has been convicted of defrauding over sixty Japanese investors in a nearly $7 million Ponzi scheme, authorities announced today. Kevin Kyes, 69, formerly of Campbell, California, and currently of Roseville, California, was found guilty of one count of conspiracy to commit wire fraud, seventeen counts of wire fraud, one count of conspiracy to commit money laundering, and two counts of money laundering.

The scheme, which took place from December 2012 through July 2015, involved Kyes and his co-conspirator, John Holdaway, 73, of Sandy, Utah, promising investors that their money would be invested in high-speed trading programs with historical returns of well over 100% annually. However, the evidence showed that Kyes and Holdaway spent the money themselves, used it to fund Ponzi-type payments back to investors, and spent it on gold-related businesses.

The Japanese investors sent approximately $6.8 million to Kyes and Holdaway during the scheme. The duo created and sent to investors fake documents, including phony account statements and forged letters from an accountant, to back up their claims. They also sent emails to investors under fake names to give the appearance that multiple people worked for them.

Kyes's sentencing hearing on today's convictions is scheduled for August 17, 2018, at 11:00 a.m., before Judge Susan Illston in San Francisco. The maximum statutory penalty for each count of conspiracy to commit wire fraud and wire fraud is 20 years in prison, a fine of $250,000, 3 years of supervised release, forfeiture, and restitution.

The maximum statutory penalty for each count of conspiracy to commit money laundering is 20 years in prison, a fine of $500,000, 3 years of supervised release, forfeiture, and restitution. Kyes's co-conspirator, John Holdaway, pleaded guilty to one count of conspiracy to commit wire fraud on October 6, 2017.

The investigation was led by the Federal Bureau of Investigation, with assistance from the Internal Revenue Service, Criminal Investigation. The case is being prosecuted by the United States Attorney's Office for the Northern District of California.

Mandatory Facts: Defendant: Kevin Kyes, 69; Criminal Charges: One count of conspiracy to commit wire fraud, seventeen counts of wire fraud, one count of conspiracy to commit money laundering, and two counts of money laundering; City and State: San Francisco, California; Exact Date: June 14, 2016; Sentence or Outcome: Sentencing hearing scheduled for August 17, 2018; Dollar Amounts: Approximately $6.8 million.

Source: https://www.justice.gov/usao-ndca/pr/former-south-bay-resident-convicted-defrauding-japanese-investors-almost-7-million