Neil Goyal lived a lavish lifestyle.
By Deepak Chitnis
WASHINGTON, DC: An Indian American investment fund manager from Chicago has been indicted under allegations that he was at the head of a large Ponzi scheme that defrauded more than 40 investors out of over $11 million.
Thirty-three year-old Neil Goyal was charged with a single count of wire fraud in Chicago’s US District Court on Thursday, according to the Department of Justice. Goyal is accused of accruing over $11.3 million in illicit funds between June of 2006 and May of 2014, by convincing 41 investors to put money into various funds. This money was then misappropriate by Goyal for his own purposes, and was covered up through false statements and other means.
Goyal was the founder and sole managing member of Blue Horizon Asset Management, LLC, and Caldera Advisors, LLC, both of which were unregistered investment advisors. Over the course of the nearly eight year-long scheme, Goyal sold limited partnerships in three Blue Horizon funds, along with limited partnerships in a Caldera Equity Fund, to investors, lying about what the funds were meant to be used for and what type of return investors could expect.
“By the first half of 2008, Goyal allegedly knew that he intended to misuse the funds for himself and to make Ponzi-type payments to certain investors. By January 2009, Goyal had stopped trading for two Blue Horizon funds and had not traded at all for the third Blue Horizon fund. In February 2009, Goyal allegedly began engaging in a similar fraud scheme with investments in the Caldera Equity Fund,” the Justice Department said, in a press release.
Now, Goyal is facing just one charge, that of wire fraud, but it is serious enough to land him 20 years in jail. On top of that, Goyal could be fined either $250,000, or twice the total gain or loss created by his fraudulent behavior – whichever is greater.
Additionally, Goyal is facing a civil fraud lawsuit from the US Securities and Exchange Commission (SEC), which alleges that Goyal used illicitly obtained funds from investors to support an incredibly opulent lifestyle for himself, his wife, and two children, along with various personal business ventures.
An arraignment date for Goyal is forthcoming, but has not yet been announced.