STATEN ISLAND — A man claiming to use funds for foreign trading stole more than $2.4 million from investors and used it to lease a BMW, buy an engagement ring and pay parking tickets, officials said.
Edward Servider, 28, who's also known as Nick Halden and lives in Staten Island, was charged with six types of fraud for using money from investors to pay for personal and business expenses, U.S. Attorney Preet Bharara announced.
"The subject in this case allegedly believed his clients weren’t ever going to ask where their money went and chose to spend it," said Bharara in a statement.
"Traders hoping to live the high life should view this case as a cautionary tale. There is no pot of gold at the end of the rainbow, only investors and the FBI and our law enforcement partners demanding you explain where the money went."
From March 2013 to July 2014, Servider and business partner Alex Vladimir Edkeshman received investments from more than 100 people through his firm EJS Capital Management, LLC, Bharara said.
EJS had an office in Brooklyn and had several salespeople make unsolicited telephone calls to potential investors, officials said.
The workers gave the people a false "performance report" from 2010 and 2013 that showed EJS got between 18 to 77 percent gross annual returns for investors, despite the fact the firm only opened in 2013, Bharara said.
The firm signed a contract with investors stating it would only use the funds for certain types of transactions and only take a commission based on their success.
However, the majority of the investor's money was used to pay business expenses for EJS and Servider and Edkeshman used them for personal expenses, Bharara said.
During that time, Servider used the funds to buy an engagement ring, lease a BMW for his girlfriend, pay for hotel rooms, rental cars and parking tickets, officials said.
Edkeshman, who was not named in Servider's complaint, was charged and sentenced last year to more than seven years in jail for his role in the scheme, Law360 reported.
Servider was arraigned on Tuesday and charged with wire fraud, mail fraud, conspiracy to commit commodities fraud, commodities fraud by misappropriation and omission, fraud by a commodity trading advisor and conspiracy to commit mail fraud and wire fraud, authorities said.
The charges carry a maximum of between five and 20 years in jail and a maximum fine of $1 million, Bharara said.
