Former Gainesville Investor Gets 20 Years for Ponzi Scheme

A former Gainesville resident working as aninvestment manager was sentenced to 20 years for his role in a Ponzi scheme that attracted hundreds of investors with the false promise of up to 10 percent monthly interest through trading on foreign currency markets, the Florida attorney generals office reported Friday.

Exploitation and deception of more than 500 Floridians totaling millions of dollars is despicable and will not be tolerated, Attorney General Pam Bondi stated in a release. I am pleased that our office stopped the Botfly Ponzi scheme before it collapsed so that victims will receive some compensation for their losses.

David R. Lewalski, 47, pleaded guilty to running the fraudulent investment scheme through a company named Botfly LLC, the state reported. He was prosecuted by the U.S. attorneys office for the Middle District of Florida in Tampa.

The attorney generals office filed a lawsuit against Botfly and its principals in 2010, stopping the firms Ponzi scheme and preserving $3.8 million in domestic assets and $1.1 million in foreign accounts for investors, the attorney general's office reported. As a result of the states litigation, Lewalski agreed to a consent judgment with our office ordering him to pay $19 million in restitution to consumers, which represents the full amount of their net losses.

According to the federal criminal complaint filed in U.S. District Court in Florida, about half the money invested with Lewalski and his co-conspirators was used for personal items such as high-end New York City properties, private jet services, Corvettes, a Ducati motorcycle, Porsches, a Ferrari, dental work, clothing and jewelry from retailers Gucci, Cartier and Hermes of Paris.

The money that was invested generated few profits and Botfly used approximately $15 million of individual investor money to pay off the monthly guaranteed investment returns.

The affidavit from Attorney General Financial Investigator William Tim Bivens stated that the investigation into Botfly began when a professor of computer software and software engineering contacted the Florida attorney general regarding his elderly fathers investment in the company.

He stated that Botfly was offering a 10 percent return per month on principal, Bivens stated. This rate of return equates to an annualized return of 120 percent simple interest and if compounded annually, a much higher rate of return.

According to Bivens affidavit, 550 people -- at least 220 from Florida, with many from Pasco County -- invested with Botfly between Jan. 1, 2008 and Feb. 28, 2010.

During the period January 2008 until September 2009, it does not appear that any investor funds were placed in any type of investment vehicle, Bivens wrote.