Sean Grusd, portrayed as a junior Bernie Madoff, could face 6 years for $23 million Chicago scam

He lived the high life in the West Loop but now has pleaded guilty to fraud. Investor John Stafford III and real estate exec Patrick Buck are among those who say they were victims of his schemes.

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Sean Grusd leaving federal court in Chicago last month.

Sean Grusd leaving federal court in Chicago last month.

David Struett / Sun-Times

Sean Grusd lived in a $5.4 million penthouse, filled with expensive art and furniture, atop a luxury condo building in the West Loop, and he got a Tesla and a Porsche, federal prosecutors say.

But they say the dazzling façade hid a web of deception — a $23.1 million scam targeting Chicago investors. Last week, the 31-year-old Los Angeles native pleaded guilty to fraud. Now, he faces a possible prison term of 78 to 97 months, according to federal sentencing guidelines.

Grusd, whose victims have compared him with Bernie Madoff and other notorious scammers, falsely told investors he was a Harvard Law School graduate, according to prosecutors, who said he promised to set up investments for them in businesses in which he didn’t even own a stake.

Late last year, Sean Grusd’s investors learned the truth: His account at a San Francisco-area bank was empty even though he’d shown them a bank statement that said there was more than $133 million in the account.

To impress his investors, Grusd had told them his brother Jared Grusd — a former executive of AOL, Spotify, the Huffington Post and the parent company of SnapChat — was his partner.

Jared Grusd was briefly named as a defendant, along with Sean Grusd, in a lawsuit filed in New York by people who said they were scam victims, but they quickly agreed to drop Jared Grusd from the case, which is still pending in court. In a court filing, Jared Grusd said he didn’t have any business dealings with his brother. Sean Grusd backed that in his own affidavit, saying, “Jared never had any knowledge of, or involvement in, any of the activities of the business ventures.”

The condo building at 900 W. Washington Blvd., where Sean Grusd lived in a penthouse.

The condo building at 900 W. Washington Blvd., where Sean Grusd lived in a penthouse.

Google Street View

In court papers, Chicago private equity investor John Stafford III has said companies he controlled were bilked out of $15 million by Grusd. Chicago real estate executive Patrick Buck said he and his family members each invested $300,000 in the scheme.

In late 2021, Stafford and Buck sold Sean Grusd two condos, including a penthouse, in a swanky building at 900 W. Washington Blvd. That complicated deal is now the subject of a lawsuit filed in Cook County circuit court.

Grusd’s father also has had legal troubles involving fraud. Dr. Ronald Grusd, 77, a Beverly Hills radiologist, completed a four-year prison term last year in connection with an unrelated healthcare insurance kickback scheme, records show.

Ronald Grusd had been featured in a 2005 story in the Los Angeles Times about people displaying art on television screens. His Mediterranean-style house had a TV in every room — 19 of them.

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