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Thursday
Oct182012

25-Year Old Florida Man Charged With $10 Million Ponzi Scheme

In what is believed to be one of the youngest Americans charged with running a Ponzi scheme, Florida authorities have charged a Boca Raton man with orchestrating a Ponzi scheme that allegedly defrauded investors out of $10 million.  Donald R. French Jr. was recently arraigned on a charge of wire fraud after originally being detained in South Africa and deported to Las Vegas to face charges he passed $750,000 in bogus checks.  After entering a guilty plea to those charges, he arrived in Boca Raton last week. Charged with devising the scheme when he was just 21 years old, French now faces up to twenty years in federal prison for the wire fraud charge.

According to authorities, French incorporated D3 Capital Management LLC ("D3"), listing an office address in the ritzy Mizner Park area of Boca Raton, Florida.  Holding itself out as a 'premier provider of global investment management' with offices in Hong Kong and Rome, D3 promised investors lucrative annual returns of fifty percent or more through investments in commodities such as emeralds.  In total, D3 managed to amass over $10 million from over 20 investors.

However, as French later confessed to an FBI agent in July, the lucrative returns were nothing more than an elaborate Ponzi scheme that existed solely to support a lavish lifestyle.  This included living abroad in Rome for five years, frequent foreign travel, and extensive gambling losses.  Indeed, the Mizner Park address listed as the principal office address for D3 turned out to be nothing more than a phone number and an address.  According to that FBI agent, French attributed his ability to convince investors to part with their hard-earned money to his "gift of gab."   Rather than invest these funds, French accumulated more than $1 million in debit card purchases and withdrew more than $1 million in cash while using investor funds as his personal piggy bank.  

French was arrested in South Africa earlier this summer and subsequently deported to Las Vegas to face charges that he passed nearly $1 million in phony checks.  According to authorities, French was a frequent visitor in Las Vegas, where he accumulated exorbitant gambling debts that were satisfied using investor funds.  However, even after investor funds were depleted, French continued to frequent Las Vegas, where he racked up $600,000 in charges at popular casino The Cosmopolitan from April 2011 to June 2011.  Earlier this summer, French agreed to plead guilty to passing a bad check and accept a prison sentence of no more than 30 months.  

Now facing federal prosecution in Florida, French has claimed indigent status and enlisted the support of the Federal Public Defender's Office.  According to court records, French is scheduled to be arraigned on November 2, 2012.  

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