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A Fox Point man was sentenced to two years in prison for conducting an investment fraud scheme that misappropriated over $2.5 million from investors.
You are viewing: Fox Point man sentenced to two years for $2.5M investment fraud scheme
David Braeger spent his investors’ money on luxury cars, cryptocurrency, personal legal fees, sponsorships for a NASCAR driver and purchasing the Silver Spring House Restaurant in Glendale in 2018, according to a Dec. 17 news release from the U.S. Attorney’s Office for the Eastern District of Wisconsin.
In addition to the two years in prison, Braeger, 57, was also ordered to repay the over $2.5 million in restitution to his victims.
According to the release:
Braeger started building the investment fraud scheme in 2017 through his Blue Star Automotive Fund, which sold limited partnerships to investors.
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Braeger originally told Blue Star investors that those funds would be used to fund a car dealership, and a total of 27 investors gave Braeger over $5.4 million.
Around half of those investor funds were provided to the dealership. But the other half were misappropriated in ways that diverged from his promise to investors. At the sentencing hearing, U.S. District Judge Lynn Adelman said Braeger was motivated by “greed and self-aggrandizement.”
U.S. Attorney Gregory Haanstad said that Braeger held no other job and earned no other income during the period he operated Blue Star.
Haanstad also said Braeger had taken action to intimidate or bully his victims as his scheme began to unravel.
What’s more, Braeger had previously been barred from serving as a broker and associating with broker-dealer firms by the Financial Industry Regulatory Authority.
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Investigators with the Federal Deposit Insurance Corporation Office of the Inspector General found that Braeger also stole $100,000 from an investor as part of a venture he called IEF, which Braeger claimed would be used to fund litigation related to a Ugandan Energy company.
Instead, Braeger misappropriated most of that money, too, for his own personal use.
Braeger’s Blue Star fraud case was referred to the U.S. Attorney’s Office by the Wisconsin Department of Financial Institutions. It was investigated by the FDIC Office of the Inspector General and prosecuted by Assistant U.S. Attorney Julie F. Stewart.
Vincent R. Zehme, a special agent with the FDIC OIG Chicago region, said the agency will “continue to work closely with our law enforcement partners to investigate and hold accountable those who orchestrate such schemes that harm consumers and undermine the integrity of our Nation’s financial system.”
Contact Claudia Levens at [email protected]. Follow her on X at @levensc13.
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Category: News