WHITE PLAINS – A hedge
fund manager from Westchester County was arrested on Thursday and charged
with security fraud and wire fraud stemming from a $19 million Ponzi scheme
through the Scronic Macro Fund.
According to Acting US Attorney Joon Kim, Michael Scronic, 46, allegedly
stole more than $19 million from investors by lying about the performance
of his investment fund, and then spent much of the money on his own lavish
lifestyle.
Scronic raised more than $19 from 45 investors in the Scronic Macro
Fund from April 2010 to present. He told the investors the fund had positive
returns in all but one of the 22 quarters from January 2012 through June
2017m with the highest reported quarterly return being 13.4 percent in
the fourth quarter of 2014.
In reality, the feds said the fund lost money in 28 of the 29 quarters
of its operations, with a total net loss of about $15.7 million before
commissions.
In addition to losing money on trades, Scronic allegedly used investor
money for personal expenses. His personal expenditures averaged more than
$500,000 a year since 2012 and included monthly rent of $12,275 on his
primary residence in Westchester County, mortgage payments on a vacation
home in Stratton, Vermont, fees for multiple beach and country clubs,
including a $30,000 payment to the Stratton Mountain Club in July of this
year, and miscellaneous items charged to credit cards in amounts averaging
more than $15,000 a month.
Scronic is charged with one count of securities fraud and one count of
wire fraud. Each charge carries a maximum sentence of 20 years in prison.
