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Financial Crimes
10/27/2011

New York man sentenced to nearly 13 years in federal prison for orchestrating Ponzi-style scheme

Ordered to pay over $5.3 million in restitution to victims

ALBANY, N.Y. — A New York man was sentenced to 151 months in federal prison to be followed by three years of supervised release. The man was also ordered to pay restitution of $5,308,340.02 to the victims of his Ponzi-style scheme involving entities formerly known under the name "Swiss Capital Harbor." The sentence is the result of an investigation by multiple law enforcement agencies, including U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI).

Christopher Bass, 54, formerly of Troy, N.Y., and Menands, N.Y., was sentenced by Senior U.S. District Judge Lawrence E. Kahn. He has been in federal custody since his initial arrest on Feb. 8, 2010.

At the time of his plea, he admitted that he relocated from Europe to Albany County, N.Y., in or about May 2006 and, thereafter, from approximately Jan. 1, 2007, through Feb. 1, 2010, he promoted, managed and directed a fraudulent investment program involving the purchase and sale of securities to investors in the Albany-area and elsewhere.

From January through August 2007, the fraudulent investment program operated under the name "Revisco Finanz AG" and, from August through December 2007, it operated under the names "Revisco Finance USA" and "Revisco Finanz AG."

Thereafter, from approximately December 2007 through Feb. 1, 2010, Bass conducted the fraudulent investment program using the name "Swiss Capital Harbor/USA, LLC" and other variations utilizing the name "Swiss Capital Harbor."

At the time of his guilty plea last year, Bass admitted having solicited and accepted a total of more than $5.5 million from more than 250 investors and, at sentencing, the government indicated that additional investigation confirmed the total deposits were more than $6.7 million from approximately 400 victims, more than 300 of whom suffered pecuniary loss as a result of their investments in the scheme.

While Bass promised these victims that their funds would be sent to Europe for investment, the majority of the investor deposits were: disbursed to Bass or used to pay for his personal expenses; used to repay investors who demanded a return of their initial investment or distribution of the income allegedly earned, as is common in such Ponzi-style schemes; and used to pay for expenses incurred in operating the fraudulent investment program.

Bass further admitted at the time of his plea that, as part of his scheme, he caused periodic account statements to be issued that reported monthly returns and account balances that were false and grossly overstated, and that he made numerous additional false statements to prospective and actual investors, including that their investments were insured, risk free, or protected by a cash reserve account. At this point, no funds have been recovered to be applied toward the victims' losses.

In addition to his plea to one count of wire fraud involving the fraudulent investment program, Bass also pleaded guilty to attempted evasion of taxes in connection with the Form 1040, U.S. Individual Income Tax Return that he filed for himself and his spouse for 2007, in which he falsely reported the amount of income that he received from operation of the fraudulent investment program.

In substance, Bass received gross income of at least $220,000 from the fraudulent investment program in 2007 with taxable income of at least $145,936, whereas he falsely reported only $114,732 in gross income and taxable income of $49,507, resulting in a substantial income tax due and owing for 2007 of at least $34,445. Bass was sentenced today to the statutory maximum of 60 months on the income tax count, to run concurrently with the sentence on his wire fraud conviction, for a total sentence of 151 months in prison.

A number of victim investors attended the sentencing proceeding, and five spoke to the court about the financial and personal devastation suffered by them and their families as a result of Bass' scheme. The victims who spoke were representative of many who lost their retirement and other life savings, and had their life plans drastically altered by losses suffered as a result of their reliance on Bass and his promises.

"The significant incarceration sentence handed down by the court today reflects the severe impact of investment fraud on the hard-working men and women who work and live in this community," said U.S. Attorney Richard S. Hartunian, Northern District of New York. "Hundreds of people trusted Christopher Bass with their financial futures, and he greedily abused that trust and left in its place a swath of financial ruin. This office, working closely with our federal law enforcement partners, is committed to combating such heinous crimes, and bringing perpetrators such as Christopher Bass to justice."

The case was investigated by ICE HSI; the Internal Revenue Service, Criminal Investigation Division; and the U.S. Secret Service. The FBI also provided assistance.

This case was prosecuted by Deputy Criminal Chief Assistant U.S. Attorney William C. Pericak and Supervisory Assistant U.S. Attorney Robert P. Storch.