A Gainesville man received a twenty year sentence in prison for orchestrating a Ponzi scheme that bilked investors out of $30 million. David Lewalski, 48, received the maximum sentence from United States District Judge James Whittemore after previously pleading guilty to mail fraud. Lewalski had originally faced additional charges of conspiracy and wire fraud before pleading guilty to a single charge of mail fraud. Along with the sentence, Lewalski was also ordered to forfeit nearly $30 million, along with various electronic equipment that was purchased with proceeds of the fraud.
Lewalski operated Botfly LLC ("Botfly"), which held itself out to be a successful foreign currency trading operation. In soliciting investors, Lewalski promised monthly returns of up to ten percent, which equated to annualized returns exceeding 100%. In total, more than 500 investors entrusted approximately $30 million with Botfly. Only a small portion of funds were invested, and little if any trading profits were generated. Instead, Lewalski used the majority of investor funds to operate a Ponzi scheme, paying roughly $15 million to investors in the form of principal and interest payments. In addition, Lewalski used investor funds to sustain a lavish lifestyle that included high-end real estate in New York City, private jets, and Ferraris.
An accomplice of Lewalski was sentenced last month to nearly three years in prison as a result of his failure to report income received from the scheme after filing personal bankruptcy. Jon Hammill received total wages exceeding $1 million from his involvement in marketing Botfly to potential investors.
The Receivership website for Botfly is here.
A copy of the indictment against Lewalski is here.
A copy of Lewalski's Plea Agreement is here.