A federal grand jury has indicted a San Francisco man on charges that he operated a Ponzi scheme that blked investors out of $7 million. Robert Tunnel, 72, was indicted on seven counts of mail fraud, thirteen counts of wire fraud, and one count of money laundering.
According to the indictment, Tunnel told friends and relatives that he was a sophisticated investor and could achieve substantial returns with low risk. In an affidavit filed by a FBI agent, Tunnel told one victim taht he was a semi-retired international attorney and had achieved handsome returns investing in commodities such as coffee and copper. From 2006 until his arrest last month, Tunnel took in $10 million from new investors consisting mainly of family and friends. Rather than investing in commodities, Tunnel made risky trades resulting in losses of $7 million of the original $10 million. Other funds were paid to investors as returns to create the appearance that Tunnel was successfully trading.
Tunnel was an attorney in California for nearly 35 years before resigning from the California bar amid allegations of misappropriation of funds from his law firm. Tunnel studied at Dartmouth and obtained his law degree from Harvard Law. Incidentally, Tunnel is not the first Harvard Law graduate to be accused of running a Ponzi scheme in recent years - Marc Dreier, a fellow Harvard Law grad, is currently serving time for masterminding a $400 million scheme in New York.
Tunnel is no longer in jail after posting a $10 million bond.