In addition to time behind bars, the man, who pleaded guilty to three counts of wire fraud, was also sentenced to repay the stolen $650,000 from a dozen victims
A 48-year-old man was sentenced to 48 months in prison after stealing hundreds of thousands from investors in a sports betting fund he created.
Man Steals $650K via Betting Fund Fraud
The criminal case involves a man identified with the initials E.G., who, according to prosecutors, engaged in an elaborate scheme between 2017 and 2023. The case was investigated by the FBI, while Assistant US Attorney Derek Wiseman was in charge of the prosecution.
The investigation uncovered that E.G. lured investors into what was known as the “Magellan Sports Fund,” promising profits and big returns. However, in reality, the 48-year-old man used the money from investors for personal expenditures. Per prosecutors, the man stole some $650,000 by using the fraudulent betting fund.
The actions of the man resulted in losses of a total of 12 people. Surprisingly, some of the investors in the “Magellan Sports Fund” were even friends of the fraudster. Back in October, E.G. pleaded guilty to three counts of wire fraud in front of the US District Court in St. Louis.
In the words of Special Agent in Charge Ashley Johnson of the FBI St. Louis Division: “Scamming people who trust you is especially loathsome.” She spoke about the method used by the fraudster, recognizing it wasn’t uncommon. “When white-collar criminals exploit the trust that already exists within their social circles, it’s known as affinity fraud,” Johnson explained.
After Guilty Plea, the Fraudster Was Sentenced to Four Years in Prison
On Wednesday, US District Judge Matthew T. Schelp sentenced E.G. to a total of 48 months in prison. Besides the four-year prison sentence, the 48-year-old man was ordered to repay the victims the money he stole from them through the fraudulent sports betting fund. The man defrauded a dozen victims out of approximately $654,861.
US Attorney Derek Wiseman recognized the man’s unlawful actions as “a yearslong sophisticated scheme.” He also rejected the possibility that this was a “one-off lapse in judgment.” The list of defrauded investors included friends of the 48-year-old man.
The investigation into his unlawful actions uncovered that he told the victims that he used a “sophisticated computer algorithm,” which enabled him to reduce betting-related risks. In addition, the man produced false performance updates, misleading the victims into believing they were profiting from the investment.
Some of the victims addressed their frustration by sending letters to the court. One person who invested $50,000 wrote that the betrayal of his friend resulted in stress and chronic anxiety. The victim in question was told that the “Magellan Sports Fund” was sold to a private equity firm, which is why he couldn’t access the money invested.
Another victim of the fraudulent betting scheme admitted to investing $60,000. The man wrote that not only he wasn’t able to gain access to his investment but needed to spend an extra $20,000 due to legal fees trying to recover the money.
