A Northwest suburban Ponzi schemer who conned hundreds of retirees out of their life savings was sentenced to 25 years in prison Thursday by a federal judge who told him he’d done “real damage.”
Daniel Spitzer, 55, of Barrington, cost 270 victims $34 million by fraudulently promising healthy returns on a U.S. Virgin Islands-based fund that was in fact nearly empty.
But the harm he did was not only financial, U.S. District Judge James Zagel told him in imposing sentence.
Many of the victims “apportion a great deal of blame to themselves,” the judge said. “A lot of them have a sense of their own foolishness.”
The shame was even worse for victims who encouraged friends and relatives to invest in Spitzer’s scheme, Zagel added.
Spitzer had been taken into custody a day earlier on Wednesday after prosecutors raised concerns about $1 million in previously undisclosed assets that he recently revealed he still holds in the Caribbean Island of St. Vincent.
He was forced to switch his pinstripe business suit for an orange prison jumpsuit, which he wore Thursday as he made an emotional apology to the court and his victims.
“I’m filled with sorrow, remorse and anguish,” the silver-haired conman said, choking up as he vowed to do everything he could to make his victims whole.
Zagel told him it was common for Ponzi schemers to partially believe their own hype, even about their intention to pay their victims back — a self-delusion he said made them more effective salesmen for their scam.
“In a sense, the defendant is the victim of the offense, he perpetrated himself,” the judge said. “But that kind of cosmic discussion makes very little difference.”
He added, “At times, he understands that the damage is done.”
Defense attorneys Molly Armour and Steven Shanin had argued for a sentence of as little as 10 years, pointing out that Spitzer had pleaded guilty and that some of the $105 million that he took from his victims was legitimately invested. Spitzer’s brother-in-law, who was among the victims, wanted leniency, Armour said, adding that Spitzer would carry “opprobrium to his grave.”
But prosecutor Madeline Murphy said Spitzer had left many victims with “absolutely nothing.”
“This was an extended act of greed” that continued even after he knew his scheme was doomed, she said.
The government is attempting to seize Spitzer’s Barrington home to help pay back his victims, she added.
Spitzer’s co-defendant, Alfred Gerebizza, was convicted at a trial last year after he refused to recognize the authority of the court, but has yet to be sentenced. Zagel on Thursday said he was even more culpable for the scam than Spitzer.