Savla, financial advisor who operated VCAP LLC, a Chicago investment fund that purported to trade in equities, options and futures contracts, admitted in a plea agreement that from 2014 to earlier this year, he raised approximately $2.3 million from investors on the promise of substantial returns.
According to the press release, the company was majorly unsuccessful during the time the fraud occurred and lost an approximate 96 percent in 2014 and more than 99 percent in 2016.
Savla still continued to solicit and accept investments as he sent clients phony account statements which fraudulently showed large profits instead of heavy losses, according to the plea agreement.
The plea agreement further states that at one point in December 2016, Savla falsely represented to clients that he accidentally committed a “fat finger trade,” an error which is caused when entering a trade online and that is what caused VCAP to decline by approximately 90 percent in a single day.
However, in the plea agreement Savla admitted that there was no such error and that the trading losses had caused the decline.
He also admitted to borrowing funds from family and friends to help repay VCAP investors.
One family member even loaned Savla $500,000, of which was partially used to repay some of the VCAP investors.
In addition, Savla admitted that he spent approximately $260,000 of investor funds for his own personal benefit, including living expenses, according to the plea agreement.
A sentence for Savla has been set for Jan. 9, 2019, at 10 a.m.; if convicted he could face up to 20 years in prison.