ATLANTA — A federal judge sentenced Craig Allen, an Atlanta area investor, for operating a fraudulent investment scheme.
According to federal officials, Allen operated a private fund called the “Cheetah Fund,” and used it to defraud dozens of people for more than $9 million.
“Allen lied to investors when he sent them account documents that intentionally inflated the Cheetah Fund’s performance,” Acting U.S. Attorney Richard S. Moultrie, Jr. said in a statement. “Allen abused the investors’ trust by failing to invest their money as promised and diverting these funds to maintain his lifestyle. For some victims, these stolen funds comprised their life savings.”
In court, federal prosecutors revealed how Allen, who was the sole shareholder and executive for C.M. Allen Capital Management, Inc., “defrauded dozens of investors across the country out of millions of dollars through his management of the Cheetah Fund.”
As Allen managed the fund and its investments, he provided potential investors with tear sheets showing returns as high as 73%.
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Prosecutors said that once they invested in Cheetah, the investors were sent fake account statements showing false gains and fake tax documents reporting them. Instead, Allen reported gains even as the Cheetah Fund lost money.
Additionally, the U.S. Department of Justice said Allen used investors’ money to pay himself and fund his lifestyle. Investors were cheated out of more than $9 million as a result of Allen’s investment fraud scheme, according to USDOJ.
In October, Allen waived his indictment, which legally means that an “offense which may be punished by imprisonment for a term exceeding one year or at hard labor may be prosecuted by information if the defendant, after having been advised of the nature of the charge and of the rights of the defendant, waives in open court prosecution by indictment.”
By doing so, Allen avoided a jury trial. Now, he will spend more than seven years in prison before supervised release and was ordered to pay $9.2 million in restitution. USDOJ also said he faces a separate, civil case from the U.S. Securities and Exchange Commission, which is still underway.
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