David Swartz Sentenced to 2 Years in Prison

According to a recent press release from the United States Attorney for the Western District of Wisconsin, David Swartz, 59, of Highland Park, Illinois was sentenced to 2 years in federal prison for wire fraud and assisting in the preparation of a false tax return. Swartz pleaded guilty to these charges on April 11, 2024. As part of his sentence, Swartz was ordered to pay $181,915 in restitution to the victim.    

David Swartz, worked as an unregistered investment advisor and fund manager, and had a close personal relationship with his client/victim, who was a resident of Madison, Wisconsin. Beginning in January of 2009, his client made regular investments into Swartz’s investment fund with the understanding that Swartz was conservatively investing the money. The press release states that beginning in 2018, David Swartz began misrepresenting the performance of the fund to his client. Despite the heavy losses to the fund, on January 29, 2019, Swartz emailed his client stating that the fund “had an incredibly great 2018” and was “solidly profitable for the year,” according to the press release.

The Attorney General’s press release states that when the fund lost a significant amount of its value in February 2020 due to risky trades, David Swartz again lied to the victim, his client, about the fund’s performance and induced the client to invest an additional $150,000. On March 18, 2020, Swartz emailed his client a purported copy of a Charles Schwab account statement for the fund. Swartz had altered the statement to show that the total value of the fund on December 31, 2019, was $1,017,191, however, the actual value of the fund was $58.

The press release states that on March 7, 2020, David Swartz provided a false Schedule K-1 for tax year 2019 to the client that showed that the client’s net short-term capital gains from his investment in the fund exceeded $500,000.  When in fact, Swartz knew that the client did not have capital gains from the fund in 2019, because the fund had significant losses. This caused the client to report owing an incorrect and additional amount of federal income tax.

If you’ve suffered investment losses due to the actions or recommendations of David Swartz of Highland Park, Illinois, contact Soreide Law Group and speak to an experienced securities lawyer at no cost regarding the possible recovery of your financial losses through a FINRA arbitration at:  888-760-6552.

Soreide Law Group represents clients nationally before FINRA on a contingency fee basis.