‘Risk-free’ fund cost investors all their money: U.S. Attorney

Anthony Vassallo, 33, of Folsom, California, and others ran Equity Investment Management & Trading Inc., a fund that purported to use a computer program designed by Vassallo to time the stock market and produce an almost risk-free annual return of 36 percent, according to a statement by U.S. Attorney Benjamin Wagner in Sacramento.
“Vassallo’s victims came from every walk of life and included his friends and family,” Wagner said in the statement. “This conviction is small consolation to Vassallo’s victims, but a message to anyone who takes advantage of others’ trust,” he said.
Vassallo lost virtually all the investors’ money and ceased trading in 2009, according to the statement. He persuaded investors not to withdraw money by falsely reporting positive returns, prosecutors said.
A co-conspirator, Kenneth Kenitzer, 66, of Pleasanton, California, already pleaded guilty in a related case and is awaiting sentencing, according to the statement.
Vassallo and Kenitzer were sued by the U.S. Securities and Exchange Commission in 2009. A receiver appointed in that case is working to recover assets for victims, prosecutors said.
Bruce Locke, Vassallo’s attorney, didn’t immediately return a message seeking comment.
–Bloomberg News–