After Arrest In Peru, Suspected $65 Million Ponzi Scheme Mastermind Finally Extradited

Fifteen years after he fled the United States as regulators closed in on his suspected massive Ponzi scheme, an Ohio man is due back in federal court later this week as his extradition is completed following his 2013 arrest in Peru. Eric Bartoli, 61, has been wanted by the Federal Bureau of Investigation since 2003 on charges he masterminded a massive Ponzi scheme that took in at least $65 million from victims. Bartoli was arrested by Peruvian police nearly two years ago in Lima, Peru, following a request by U.S. authorities for his extradition and after CNBC featured Bartoli on "American Greed: The Fugitives." Bartoli faces an October 2003 indictment on charges of money laundering, securities fraud, wire fraud, conspiracy and attempted tax evasion. Additional charges are also likely as a result of Bartoli's decision to flee.

Sometime in 1995, Bartoli created the Cyprus Funds, Inc. ("Cyprus Funds") as an open-ended mutual fund that purportedly would invest throughout Latin America and the United States. Cyprus was advertised to potential investors as a safe and conservative investment that would provide a constant stream of steady returns. In total, Bartoli would raise more than $65 million from approximately 800 investors in the United States and Latin America - of which roughly $30 million was returned to investors. Initially, all signs pointed to Cyprus being a great success, with Bartoli making numerous real estate purchases in his hometown Doylsetown, Ohio, including a Victorian mansion, three storefront boutiques, and a huge 12-acre farm house. He even transformed a building into a replica of a 16th century pub - where authorities later found jewelry and gold coins hidden in a passage behind a wall.

However, in 1999, investors stopped receiving their regular dividend checks.  Bartoli fled as regulators closed in, and an indictment and arrest warrant was issued in October 2003.  After moving through several states, he then moved to Italy before finally settling down in Peru - where he had gained citizenship in 2000.  Despite allegations that authorities knew of his whereabouts in Peru, Bartoli made no attempt to conceal his presence, working as an financial adviser, Internet finance commentator, and real estate prospector.  Bartoli is alleged to have maintained blogs under the pseudonym Enrico Orlandini, discussing gold and silver investments as well as Dow Theory analysis.  These efforts also resulted in the loss of hundreds of thousands of dollars by unsuspecting victims.

Authorities estimated that Bartoli's scheme ensnared nearly 1,000 victims who suffered collective losses of at least $30 million.  Those victims have received nearly $10 million in total distributions from Receiver Michael Goldberg.  This recovery could likely increase as a result of Bartoli's capture and anticipated cooperation.