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Ponzi Scheme Designer To Be Sentenced
A California man who scammed individuals out of significant funds as part of a Ponzi scheme was recently sentenced in federal court to 108 months in prison.
Peter Frommer, 35, of Santa Barbara, California, swindled 50 of his clients out of approximately $9 million, according to California news source City News Service. The victims suffered losses so significant, some considered suicide.
His investment pyramid, called "Cap Exchange," was a front to the plan, according to the news source. Frommer claimed to trade surplus property of closed companies, but instead he took the money for himself and lived lavishly in Malibu, California.
The scam occurred from 2004 to 2006, and Frommer promised a 15 percent return on funds in as little as six weeks time, the news source said.
"Those are the true circumstances of Frommer's offense that merit a harsh sentence from the court," prosecutors said regarding multiple stories of bankruptcy, loss of college and retirement finds, losing home and suicidal thoughts from clients, the news source reported.