Fake CDs At Heart Of $129 Million Ponzi Scheme, Feds Say
If you bought certificates of deposit that you thought were issued by Millennium Bank, United Trust of Switzerland, or Sterling Bank and Trust, you may have a problem. That’s because federal prosecutors say that William Wise and Jacquline Hoegel operated a massive Ponzi scheme by which they marketed and sold fraudulent CDs supposedly issued by these banks to more than 1,200 individuals who invested over $129.5 million to purchase them.
The government says that the defendants contended that Millennium Bank was a bank licensed in St. Vincent and the Grenadines, and was represented to be a wholly-owned subsidiary of United Trust of Switzerland, which was purportedly a private financial services company in Switzerland. CD purchasers allegedly were told that Sterling Bank and Trust was an international private bank managed and administered in Switzerland. Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust were all controlled by Wise, with Hoegel as his second-in-command, according to the government. Hoegel ran the Napa, California, office where most CD purchasers sent their funds, and from which the CDs were administered.
The CDs issued by Millennium Bank, United Trust of Switzerland, and Sterling Bank and Trust all promised CD purchasers guaranteed rates of return—sometimes over 16 percent—that were allegedly based on overseas investments. In fact, prosecutors say, CD purchasers’ funds were not used for overseas investments that generated the promised returns; the funds were instead used to enrich Wise and Hoegel and to make interest payments to earlier CD purchasers.