Man who used his own friends’ investment money on Ferrari and spa resort sentenced in NC
A Ponzi schemer who used investors’ money to register a Ferrari and receive “services” at a spa resort was sentenced in a federal courtroom in Charlotte this week.
Gustavo Guzman, a 61-year-old from Fullerton, California, was sentenced Monday to five years and 10 months in prison for stealing at least $2 million from investors, U.S. Attorney Dena King said in a statement.
Guzman defrauded 10 people in the Carolinas, California, Washington and Illinois, according to a criminal complaint by the U.S. Securities and Exchange Commission.
U.S. District Judge Robert Conrad Jr., who sentenced Guzman, called Guzman’s conduct “reprehensible over a long period of time.”
Guzman bilked close friends, according to court records. One considered him “a trusted family friend,” and another as someone they’d known for at least 15 years, court documents show.
“Several of Guzman’s victims suffered substantial financial hardship and are under extreme emotional distress as a result of Guzman’s deception and scheme,” according to a statement by King’s Charlotte-based office.
Guzman also illegally paid his apartment rent with the money, the SEC complaint shows.
How the man pulled off his scheme
Authorities extradited Guzman from Australia in November 2022 to face charges in the case. He pleaded guilty in July 2023 to securities fraud, The Charlotte Observer previously reported.
According to court documents, Guzman ran his scheme from April 2010 to August 2015. He told investors that he would use their money to trade in options and similar investments, according to the SEC complaint.
He instead ”stole a substantial portion of the investors’ money and used it to fund his personal lifestyle,” according to the statement by King’s office.
That included making “large credit card payments and cash withdrawals, and to pay for personal expenditures,” King’s office said.
“Guzman suffered massive trading losses with the money that he did invest and used some of the victims’ money to make Ponzi-style payments to investors,” according to the statement.
He “lied to his victims” about their investments and provided them “sham IRS forms and fraudulent account statements,” the statement by King’s office said.
When he learned the government was about to charge him, he fled to Australia, prosecutors said.
Guzman was in federal custody Tuesday awaiting transfer to a federal prison to be determined, King said.
The FBI in Charlotte and the Securities Division of the N.C. Secretary of State’s office investigated the case. The SEC conducted a parallel investigation, prosecutors said.
Federal prosecutors thanked authorities in Australia for their help in the case.
This story was originally published December 3, 2024 at 2:26 PM.