An Encinitas man was sentenced to a two-year term in prison today for his role in a Ponzi scheme that defrauded investors out of nearly $5 million.
John Clement, 65, pleaded guilty in September to a single count of wire fraud and was sentenced by U.S. District Court Judge Irma Gonzalez.
Clement was ordered to pay $4.9 million in restitution, but it was unclear if he had the means to do that.
Starting in March 2007, Clement falsely represented to investors that Edgefund Capital was a successful hedge fund that specialized in trading stocks on a daily basis, and that investors would make between 1.5 percent and 2 percent on their investments monthly, with little or no risk involved, according to court records.
Clement also induced investors to let their profits ride by issuing false account statements, showing that that investors were making money, when he knew the returns paid to later investors came from early investors, according to court records.
—City News Service