Robert L. Holloway, $33 Million Investment Scheme, California 2014

A California investment manager has been found guilty in federal district 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 7-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. He served as the chief executive officer and managing partner of US Ventures.

Between October 2005 and April 2007, Holloway recruited investors for US Ventures by making false representations about the company, including that US Ventures used proprietary trading software that was consistently profitable, US Ventures generated returns of 0.8 percent per trading day and US Ventures would retain a 30 percent share of investors’ profits as a management fee.

However, contrary to the returns shown on the reports Holloway distributed, US Ventures in fact lost more than $10 million in trading, and 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. US Ventures raised more than $33 million from investors for its trading activities.

The evidence at trial also showed that Holloway misappropriated investors’ funds for a variety of personal expenses, including supporting his then-wife’s eBay business and purchasing hundreds of thousands of dollars of jewelry.

U.S. District Court Judge Robert J. Shelby set sentencing for October 20, 2014.

The case was investigated by the FBI’s Salt Lake City Field Office and the IRS-CI’s Las Vegas Field Office. This case was 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.

The dollar amounts involved in the scheme are staggering, with US Ventures raising more than $33 million from investors for its trading activities.

Holloway’s scheme is a stark reminder of the need for investors to do their due diligence before putting their hard-earned money into any investment opportunity.

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