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January 28, 09

NEWS / MAN WHO RAN MULTI-MILLION DOLLAR PONZI SCHEME SENTENCED TO FOUR YEARS IN FEDERAL PRISON


Nora R. Dannehy, Acting United States Attorney for the District of Connecticut, announced that DALE L. GRAYBILL, 64, of North Haven, was sentenced today by Senior United States District Judge Peter C. Dorsey in New Haven to 48 months of imprisonment, followed by three years of supervised release, for operating a multi-million dollar Ponzi scheme in which he solicited investments for fictitious investment programs.

According to documents filed with the Court and statements made in court, GRAYBILL falsely represented to investors that he had special access to exclusive, government-backed trading programs that were originally opened only to the very wealthy, but which he could make available to them. GRAYBILL held meetings at his former residence in Branford and solicited potential investors to invest in “trading programs.” GRAYBILL told investors that he would place their investment funds in safe, exclusive, offshore, high-yield bank debenture “trading programs” that would produce greater than market rates of returns of up to 25 percent per month at little or no risk. GRAYBILL further told investors that their funds would be used to facilitate the purchase and sale of newly issued currency and fresh-cut bank debentures at a discount, and that the financial instruments would be sold at a substantial profit, which would generate high returns. GRAYBILL told investors that their principal was secured by United States Treasury Bills.

After receiving the funds from investors, GRAYBILL would divert the funds for his own personal use and benefit, including paying business expenses, and making lulling payments to investors to create the appearance that the investments were safe, secure, and had been invested as promised. During the life of the scheme, GRAYBILL’s investors provided millions of dollars to be invested in the so-called “trading programs.”

On June 15, 2005, GRAYBILL pleaded guilty to one count of mail fraud and one count of making and subscribing a false 2002 tax return. The mail fraud charge stemmed from GRAYBILL’s receipt of a check in the amount of $398,910 in June 2002. The source of the funds for the check were monies that had been “invested” and were intended to be distributed back to the victim investors. GRAYBILL did not return the funds, but instead used the funds to pay his own personal expenses, including credit card bills, gambling expenses, and checks to cash.

The false tax return charge stemmed from GRAYBILL’s using the proceeds from the Ponzi scheme without declaring the funds as income, which caused a tax loss to the Government of $93,293 for the 2002 tax year.

Today, Judge Dorsey sentenced GRAYBILL to 48 months of imprisonment on the mail fraud conviction and a concurrent three-year term of imprisonment on the tax conviction. Judge Dorsey also ordered GRAYBILL to pay to his victims restitution in the amount of $10,672,876. GRAYBILL also must pay $93,293 to the Internal Revenue Service.

To date, the court-appointed receiver has collected approximately $817,000 in funds that will be distributed to victims.

This case was investigated by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigation Division. The case was prosecuted by Assistant United States Attorney Michael S. McGarry.

Tags: document, criminal investigation,
 




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