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Former Local Radio Host Charged In Ponzi Scheme
AURORA, Ill. (Aurora Beacon News) ― It could be the Case of Chicago's Mini-Madoff: a prominent investment adviser being accused of running a Ponzi scheme.
The Illinois secretary of state's Securities Department has accused Ralph Russell of defrauding three clients out of $260,000. Russell, of Aurora, used to host a Sunday night financial advice program on WGN radio.
The alleged fraud is much smaller than the case of New York's Bernie Madoff, who prosecutors say has confessed to diverting $50 billion, but the substance of the charge is similar.
The state agency said Russell, operating RWR Capital Management LLC, sold clients bogus shares of investment funds. Jim Nix, senior enforcement attorney for the state, said client money was used to pay off earlier investors, the definition of a Ponzi scheme.
The agency said that from September 2004 to October 2007, Russell often generated false statements to show the clients their investments were making money, when in reality he was using the money to pay bank overdraft fees or to deposit in his personal account.
A secretary of state hearing officer is to take up the case Feb. 25. The agency wants to fine Russell and bar him from the securities business in Illinois.
John Gibbons, an attorney for Russell, declined to discuss the charges. Russell could not be reached.
Nix said the unidentified clients have received an unknown amount of restitution.
Russell's radio show, "On the Money," ran on WGN from 1999 to 2006.
(CBS 2, the Naperville Sun and the Aurora Beacon-News are news partners covering stories in the western suburbs. Send story tips to tips@cbs2chicago.com. (© MMIX, CBS Broadcasting, Inc. All Rights Reserved.)
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