Unsealed FBI affidavit alleges Rick Siskey was operating ‘Ponzi’ - | WBTV Charlotte

Unsealed FBI affidavit alleges Rick Siskey was operating ‘Ponzi’ scheme

Rick Siskey (LinkedIn Charlotte) Rick Siskey (LinkedIn Charlotte)
CHARLOTTE, NC (Rick Rothacker/The Charlotte Observer) -

In an affidavit unsealed by court order Friday, an FBI agent alleged that the late Charlotte businessman Rick Siskey was operating a “Ponzi” scheme in which investor money was largely used to pay off other investors and to fund personal spending, including payments to casinos.

In the affidavit, Special Agent Timothy Stutheit said there was probable cause to believe that from January 2011 to December 2016 Siskey had “devised a scheme to defraud and/or obtained money by false or fraudulent pretenses,” according to the document, which was unsealed Friday after a motion to intervene by the Observer.

Questions about Siskey emerged on Dec. 21, when a federal judge issued an order saying the prominent SouthPark home of Siskey and his wife, Diane, may be subject to forfeiture to the U.S. government. That ruling was prompted by Stutheit’s sealed affidavit alleging the property had been derived from proceeds of fraud violations. The order contained no other details of the fraud allegations.

On Dec. 28, Rick Siskey committed suicide.

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The Observer on Tuesday filed a motion in federal court asking for the unsealing of documents in the case. The U.S. Attorney’s Office in Charlotte did not oppose the action except in the case of a document that included taxpayer information. On Friday, U.S. Magistrate Judge David Cayer issued an order unsealing the documents except for the one with taxpayer information.

The unsealed affidavit said law enforcement opened its investigation in October 2015 based on suspicion that Siskey was “co-mingling personal and business funds” in transactions involving casinos and business accounts.

“Based on a review of those transactions, law enforcement suspected that Siskey was operating a ‘Ponzi’ scheme,” the affidavit says.

The affidavit focuses on a fund called TSI Holdings that Siskey started in 2010. The Observer has previously reported that the FBI had contacted Siskey about TSI.

The affidavit said a financial analysis showed that from January 2011 to November 2015 about $31 million was invested in TSI’s account. About $23.5 million came from about 100 TSI investors, according to the affidavit.

From January 2011 to November 2015, about $32 million was withdrawn from the TSI account, according to the affidavit. Of those withdrawals, $16 million was deposited into a Siskey personal account. Another $10 million had been used to pay what appeared to be individual investors, the affidavit says.

According to the affidavit, Siskey sent over $15 million from his personal account to casinos, with about $12 million coming back in from casinos, for a net outflow of about $3 million. Information from numerous casinos showed “a pattern of extensive high stakes gambling by Siskey, to include bets of as much as $70,000 per hand,” the affidavit says.

On Dec. 12, law enforcement officials interviewed numerous TSI investors – several of whom, the affidavit says, were admittedly unsophisticated investors and several of whom were elderly. They were told Siskey would invest their money and that investments were “safe” in a “guaranteed fixed rate of return investment,” the affidavit says.

The affidavit lists a number of specific investor transactions. For example, on Feb. 4, 2015, an unnamed investor invested $150,000 into the TSI account, while another invested $70,000. One day later, $210,000 was sent from the TSI account to the Siskey personal account, and later that day $1 million was sent from the Siskey account to the Seminole Hard Rock Resort and Casino, according to the affidavit.

After the transfer, Siskey’s personal balance was $14,000. “Thus, it appears that Siskey is taking money intended for investment and gambling with the money,” the affidavit says.

On Dec. 12, according to the affidavit, authorities attempted to interview Siskey. He could not provide details of TSI’s assets and what could be used to pay back about $19 million to more than 100 investors. Soon after, Siskey ended the interview, according to the affidavit.

In the affidavit, the FBI agent said that because funds in bank accounts are easily moved “restraining orders are not sufficient to secure funds in bank accounts,” adding: “Therefore, the issuance of seizure warrants is appropriate to secure the funds identified herein for forfeiture.”

In Charlotte since 1985, Siskey, 58, was known as the founder of financial services firm Wall Street Capitol, with which he was no longer associated at the time of his death. He also invested in start-up companies and real estate. In 1995, the Siskey YMCA in Matthews was named for the family because of a donation the couple made.


 

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