In a hard-fought federal trial, Louis F. Petrossi, 77, founder and president of the Wealth Research Institute, was convicted of securities fraud, investment adviser fraud, and wire fraud after a four-day trial in the Middle District of Pennsylvania. The verdict lands another legal blow against the Nevada-based financier, who systematically looted more than $1.8 million from over 25 investors under the false promise of high-growth startup investments.
Petrossi marketed the Chadwicke funds as golden tickets to invest in industry titans like Lyft, Inc., Pinterest Inc., Spotify Technology SA, Palantir Technologies, and Maplebear Inc. But instead of funneling money into these startups, he diverted over $1.1 million to line his own pockets — paying BMW, funding home renovations, and covering personal legal bills. Of the total $1.8 million collected between January 2015 and January 2017, only $665,400 went to actual startup investments.
To cover his tracks, Petrossi issued fraudulent statements, including a spreadsheet emailed in August 2016 that wildly inflated the purchase prices and values of the securities held by the Chadwicke funds. These fabricated records were designed to mislead investors and conceal the massive misappropriation of their hard-earned capital.
The fraud unfolded even while Petrossi was under court-imposed restrictions. On May 3, 2016, he was arrested in Nevada on a federal indictment tied to a separate market manipulation scheme involving ForceField Energy Inc. As part of his pre-trial release, he was explicitly barred from any job involving investor funds. Yet between that date and January 2017, he continued to solicit $210,000 in new investments and distributed the falsified spreadsheet to maintain the illusion.
Petrossi now faces a maximum of 20 years in prison in Pennsylvania, where United States Chief District Judge Christopher C. Conner will preside over his sentencing. This conviction adds to a growing list of legal disasters: in May 2017, a Brooklyn jury already found him guilty in the ForceField Energy Inc. case, where he again faces up to 20 years under the watch of U.S. District Judge Brian M. Cogan.
The case was prosecuted by Assistant United States Attorney Mark E. Bini of the Eastern District of New York and Special Assistant United States Attorney John O. Enright of the Securities and Exchange Commission’s Enforcement Division. Richard P. Donoghue, U.S. Attorney for the Eastern District of New York, and FBI Assistant Director-in-Charge William F. Sweeney, Jr., emphasized the cross-jurisdictional effort that brought Petrossi to justice — a warning to fraudsters who think they can exploit loopholes across state lines.
RELATED: Louis Petrossi Convicted in $131M Market Manipulation Scheme
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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