What You Must Know
- James A. McDonald Jr., arrested over the weekend, was a fugitive at the very least since Nov. 2021.
- He used consumer and investor funds for private bills and Ponzi-like funds, authorities allege.
- He allegedly misplaced consumer belongings by taking a dangerous quick place, prosecutors say.
A former advisor and paid CNBC visitor analyst who was charged with defrauding buyers after shedding over $30 million in consumer belongings in a dangerous quick place has been arrested after practically three years as a fugitive, authorities mentioned.
James Arthur McDonald Jr., 52, previously of Arcadia, California, was arrested Saturday at a residence in Port Orchard, Washington, and made his preliminary look two days later in U.S. District Court docket in Tacoma.
He’ll arrive in Los Angeles within the coming weeks to face federal expenses there, the U.S. lawyer’s workplace for California’s central district introduced Monday.
At his look in Tacoma, McDonald, whom the federal government considers a severe flight threat, waived a detention listening to and agreed to being detained whereas reserving the suitable to such a listening to within the California district the place he’s been charged, based on a courtroom doc.
McDonald had been thought-about a fugitive since at the very least November 2021, when he failed to look earlier than the U.S. Securities and Alternate Fee to testify after allegations arose that he had defrauded buyers, the prosecutor’s workplace mentioned.
In September 2022, the SEC filed a civil criticism charging McDonald and one in all his companies with violations of federal securities legislation, alleging he misappropriated hundreds of thousands in investor and consumer funds that he used on private bills and “Ponzi-like funds.”
U.S. District Decide Percy Anderson has discovered McDonald chargeable for about $3.8 million in web earnings gained from the alleged conduct, prosecutors mentioned.
Earlier than fleeing, McDonald appeared to have terminated his earlier cellphone and electronic mail accounts and advised one person who he deliberate to “vanish,” the U.S. lawyer’s workplace mentioned, citing courtroom paperwork.
In January 2023, a federal grand jury in Los Angeles returned an indictment charging him with one rely of securities fraud, one rely of wire fraud, three counts of funding advisor fraud, and two counts of partaking in financial transactions in property derived from illegal exercise.
If convicted of all expenses, McDonald may face over 50 years in jail: a statutory most sentence of 20 years in federal jail for every securities fraud and wire fraud rely, as much as 10 years on the financial transactions derived from illegal exercise rely, and as much as 5 years on the funding advisor fraud rely.
McDonald was the CEO and chief funding officer of two corporations — Hercules Investments LLC, primarily based in downtown Los Angeles, and Index Technique Advisors Inc., primarily based in Redondo Seaside — and regularly appeared on the CNBC monetary tv community, based on prosecutors.