Uh oh… the CNBC financial commentator turned fugitive of the law has been captured by federal law enforcement, bringing an end to a three-year goose chase for the guy.
Before fleeing authorities, 52-year-old James Arthur McDonald Jr. was CEO and chief investment officer of both Hercules Investments LLC and Index Strategy Advisors Inc which are based in Redondo Beach. Back in 2020, the Department of Justice claims he lost tens of millions of dollars from Hercules clients after adopting a “risky short position” that jeopardized the nation’s economy, following the presidential election.
The department alleged he predicted both the COVID-19 pandemic and election would cause major selloffs and essentially a stock market drop.
Well, that didn’t happen.
As a result, the department found Hercules lost up to $40 million. To try and clean up his mess, the DOJ further alleges McDonald solicited millions from investors to make up for the loss but “misrepresented how the funds would be used.”
Read more from The New York Post:
McDonald is also suspected of obtaining $675,000 in investment funds he raised from one victim group, which he used to splurge on himself — “spending roughly $174,610 of them at a Porsche dealership.”
According to the DOJ, he also allegedly transferred over $100K of those funds to the landlord of a home he was renting in Arcadia, California, and then another $6,800 to an online store to buy designer clothing. The alleged fraudster reportedly sent clients falsified account statements, “including for one client who invested approximately $351,000.”
The DOJ reported that the client later asked for his money to make a down payment on a home but was told by McDonald “that much of the money had been lost, and he never got his full investment back.”
In 2022, while on the lam, a United States District Judge found McDonald liable for $3,810,346, representing his net profits gained because of the alleged conduct, according to the SEC.
In January of 2021, he was indicted by a federal grand jury on seven counts of wire fraud, securities fraud and investment adviser fraud. In November 2021, McDonald was called to appear before the United States Securities and Exchange Commission to testify on the accusations of defrauding investors. However, the DOJ claims he never showed.
Instead, the DOJ alleges he deleted all his online accounts and sent a cryptic message to a friend that he planned on vanishing. Well, he successfully avoided the Feds for three years until this weekend when he was caught in Port Orchard, Washington, per KTLA.
He’s expected to be extradited to Los Angeles for his next hearing, the report says. If convicted, he faces a maximum of 20 years in prison.
