Guilty plea in $15 million Illinois Ponzi scheme that scammed 300 investors

A former Illinois investment adviser has pleaded guilty to defrauding 300 clients out of $15 million, in a crime that has become increasingly visible since the Bernard Madoff scandal.

This one took place in the nation’s heartland – Decatur, Ill.

William Huber operated three investment funds, the Quarter Funds, the Symmetry Fund, and the Trimester Fund, from an office near Decatur. His clients included friends and new customers attracted by what appeared to be the stellar performance of his investment funds.

At one point he reported to his clients and to the Securities and Exchange Commission (SEC) that he was managing $40 million in investor funds. Investigators eventually discovered that he was really managing only $3 million.

Mr. Huber allegedly used new investments to pay out proceeds to other investors based on their inflated account statements. The scheme worked for years, but once investigators arrived at his business, they quickly uncovered what they describe as a classic Ponzi scheme.

“Clients who requested redemptions based on the falsely inflated position of their investments were paid with funds invested by other clients,” according to federal court documents.

Officials say while much of the money was used to maintain the illusion of a successful investment adviser, some of it was diverted for Huber’s personal use.

In September 2007, Huber wired $500,000 from the Symmetry Fund through two bank accounts. The money was used to purchase a house in La Jolla, Calif. He purchased another home in Naples, Fla.

He also paid $331,000 in premiums for life insurance policies, according to court documents.

Huber’s guilty plea did not involve a plea bargain. The SEC shut him down as an investment adviser in September 2009.

“Investors need to know the market and understand realistic terms and rates of return before investing,” said J. R. Ball, of the St. Louis Office of the US Postal Inspection Service. “Victims in these types of cases often become shortsighted and only focus on front-end promises.”

Sentencing is set for December 10.