A Florida man was sentenced to thirty months in prison for his role in a Ponzi scheme that took in more than $30 million from investors. Jon Hammill, of St. Petersburg, Florida, pled guilty in August to bankruptcy fraud and faced a maximum sentence of up to five years in federal prison. The bankruptcy fraud charge resulted from Hammill's failure to disclose his involvement in the scheme after he filed personal bankruptcy in February 2009. The mastermind of the scheme, David Lewalski, recently pled guilty to charges of wire fraud and faces up to twenty years in federal prison at sentencing.
According to court records, Lewalski and Hammill operated and marketed Botfly LLC ("Botfly") to investors beginning in January 2008. Potential investors were told that Botfly was a very successful commodities trading firm, and were promised returns of up to 10% monthly through the buying and selling of foreign currencies. Investors were provided promissory notes from Botfly reflecting their investments, along with a password to access monthly statements. Hammill, who was an investor in Botfly before going to work there in November 2008, was paid to handle investor paperwork and solicit new investors. In total, more than 500 investors entrusted approximately $30 million with Botfly. But rather than engage in forex trading, Botfly failed to invest the majority of the $30 million it raised. Instead, $15 million was used to pay returns to existing investors. Additionally, nearly $2 million was used to sustain Lewalski's lavish lifestyle that included expenses for luxury automobiles, lavish hotels, private jet charters, and designer clothing.
When Hammill filed for personal bankruptcy in February 2009, he failed to disclose his involvement or income stream from Botfly, instead directing funds from Botfly to a shell corporation he controlled and cashing paychecks rather than depositing them in his bank account. Hammill received total wages exceeding $1 million, paid out of investor funds. A bankruptcy court later revoked Hammill's discharge of his pre-bankruptcy debts.
The Receivership website for Botfly is here.
A copy of the complaint filed by the Florida Attorney General against Hammill is here.
A copy of the indictment against Lewalski is here.
A copy of Lewalski's Plea Agreement is here.