Pleasanton Weekly

News - February 28, 2014

Pleasanton man sentenced in Ponzi scheme

Scam brought in more than $80 million between 2006 and 2008

by Glenn Wohltmann

A Pleasanton man has been sentenced to six years in federal prison for his role in a Ponzi scheme that netted more than $80 million in a little over two years.

Kenneth Kenitzer, 70, was convicted of one count of wire fraud in connection with the scam.

Beginning in 2006, Kenitzer and partner Anthony Vassallo ran Equity Investments Management & Trading (EIMT). Vassallo claimed he developed computer software that enabled him to make profits of about 36% per year. Investors were told the strategy had worked for years, but court documents show Vassallo's strategy lost money overall.

Kenitzer was the primary point of contact for investors, and he was aware EIMT never made money and learned that Vassallo was lying, according to United States Attorney Benjamin B. Wagner.

The scheme began to unravel in late 2008, and investors started demanding their money back, leading Vassallo and his intermediaries to engage in stalling tactics, Wagner said.

More than 300 people invested at least $83 million to the scam, with more than $55 million returned to investors. Nearly $17 million was paid out to prop up the Ponzi scheme, with a net loss to investors totaling more than $40 million, court records show.

"While Kenitzer wasn't the primary salesman of EIMT, his administration of the money and of some sub-funds was a crucial part of keeping the scheme running as long as it did," Wagner said.

Comments

There are no comments yet for this post

Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: *

Choose a category: *

Since this is the first comment on this story a new topic will also be started in Town Square! Please choose a category that best describes this story.

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields