Sep. 10–Two years ago, Donald C. O’Neill set up offices in the same polished high-rise building in downtown Fort Lauderdale that houses the U.S. attorney. Now prosecutors say they shared thepremises with a sophisticated crook.
O’Neill, prosecutors allege, used the Internet and a staff making cold calls to raise $13.7 million from investors in a bogus hedge fund and foreign currency investment scheme.
He is accused of spending about $10 million of investors’ money on himself, living the high life: private chartered planes; a $3 million house for himself, as well as luxury homes for his wife and mother-in-law; a new BMW 740i and other high-end cars; gambling trips to the Hard Rock Hotel and Casino in Las Vegas; golf club memberships; jewelry and custom-made suits. A complaint before the U.S. Commodity Futures Commission also claimed O’Neill used investors’ money to cover an $800,000 gambling loss.
The U.S. Attorney’s Office on Tuesday announced a 40-count indictment against O’Neill, alleging wire and mail fraud and money laundering. If convicted, he could be sent to prison for decades and ordered to pay millions of dollars in fines.
But, prosecutors say, O’Neill has left the building. He is considered a fugitive.
According to the indictment, O’Neill, formerly of Lighthouse Point, was the president and owner of three companies, Frecom, Momentum and Orca, which offered hedge fund investments.
A hedge fund is a risky investment pool, often headed by a famous money manager or wheeler-dealer who seeks a large cut of any profits as an incentive. Hedge funds, which are not regulated by the Securities and Exchange Commission, engage in speculative investment techniques such as short stocks, leveraged options and investment futures.
O’Neill’s companies offered 38 well-heeled investors a chance to make money in foreign currency. But, according to the indictment, he didn’t invest all the money entrusted to him by the investors.
Instead, he distributed a minimal amount, about $700,000, to investors who opted to receive their profits on a monthly basis, creating a false sense of security.
He allegedly misappropriated another $2.7 million of investors’ money to pay for Orca Fund business expenses, including salaries and rent for office space.
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