A former CNBC financial commentator in Los Angeles County pleaded guilty to fraudulent investors from millions of dollars, officials announced Wednesday.
The Justice Department said previously James Arthur McDonald Jr., 52, of Arcadia, is the CEO and chief investment officer of the two companies headquartered in Los Angeles. Beach.
According to the claims, McDonald lost tens of millions of dollars belonging to Hercules’ clients in the second half of 2020 after adopting “a risky short position to effectively bet on the health of the US economy in the aftermath of the US presidential election.” I did.
McDonald predicted that the Covid-19 pandemic and elections would lead to massive selling that would lower the stock market.
DOJ claimed that when decline did not come, his client lost between $30 million and $40 million.
In early 2021, McDonald raised capital for Hercules in search of millions of dollars worth of investor funds, but “how the funds were used and the massive losses Hercules had previously supported could be disclosed. I misrepresented it that there was none,” DOJ said.
McDonald’s raised an investment fund of approximately $675,000 from one victim group. He spent more than $174,000 of this money at a Porsche dealer and transferred about $110,000 to his landlord for the home he had rented in Arcadia. He also spent about $6,800 on a website selling designer menswear.
“McDonald also scams clients from his other company, ISA, using less than half of the roughly $3.6 million he raised for transaction purposes,” the DOJ added. “McDonald’s total losses ranging from around $2,745,892 to about $3,025,892, according to his judicial agreement.”
MacDonald was a fugitive to the law to testify about investor accusations after failing to appear before the U.S. Securities and Exchange Commission in November 2021.
Before fleeing, McDonald said he had deleted all his phone and email accounts and told one person he was planning to “disappear.”
He was a fugitive until June 2024 when the FBI arrested him and found him at a hideout in Port Orchard, Washington.
At the hideout, the DOJ said law enforcement discovered a fake Washington, D.C., McDonald’s photo and a driver’s license named “Brian Thomas.”
On February 19, the DOJ announced that McDonald had agreed to plead guilty to one count of securities fraud, a felony sentenced to a maximum statutory sentence of 20 years in federal prison.
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