Dan Wise, Former Scottsdale CPA, Arrested -- Again -- for Charges Related to Alleged $66 Million Ponzi Scheme
Dan Wise, a former Scottsdale accountant, was arrested yesterday for crimes related to allegedly running a $66 million Ponzi scheme, marking the fourth time he's been arrested in connection with the same scheme.
Wise, 55, was indicted earlier in the week on 102 federal charges for the alleged scheme, which the U.S. Attorney's Office says ran from 2005 to 2008.
Wise was first arrested by Scottsdale police in April 2009 after authorities served warrants on his properties, and was rearrested on charges that he was running the real-estate Ponzi scheme the next month.
He was then arrested for the third time after a complaint -- filed by then-Maricopa County Attorney Andrew Thomas -- accused him of stealing another $1 million by telling his clients he was making Internal Revenue Service payments for them.
County court records show his trial on those charges is scheduled for June.
Now, Wise has been indicted by a grand jury on federal charges, including mail fraud, wire fraud, and money laundering.
According to the U.S. Attorney's Office, Wise "fraudulently induced victims to 'invest' approximately $66 million with false promises that he could earn victims high-yield rates of return by making short-term, high-interest hard money loans in real estate ventures."
In textbook Ponzi-scheme fashion, the feds say Wise didn't make the investments, but instead paid off the old "investors" with the new "investors'" money.
Wise banked around $7 million for personal use, prosecutors allege.
Wise's case certainly isn't the sexiest Ponzi scheme case (see: Bernie Madoff, Scott Rothstein), but prosecutors are apparently going after him pretty hard.
It was really a simple Ponzi scheme, at least according to what's outlined in the federal indictment, as the scheme unraveled when Wise was running low on cash and allegedly resorted to the IRS scam against his clients -- the same clients who were "investing" in the alleged scheme.
Around 200 people invested in Wise's alleged scheme, according to the indictment.
Since Wise allegedly used the United State Postal Service to mail off things like phony investment summaries, that accounts for 44 counts of mail fraud.
By allegedly receiving money by fraudulent means, the feds racked up 13 counts of wire fraud.
Wise's banking transactions connected to the alleged scheme account for 44 money-laundering charges.
If convicted on all counts, Wise faces approximately forever in prison, since the fraud charges carry maximum prison sentences of 20 years per count.
In 2009, the Arizona Corporation Commission issued one of its largest securities sanctions in history, ordering Wise to pay $67.2 million in restitution to his clients and an additional $5.7 million in penalties, finding him responsible for ripping off investors.
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