LIHU‘E — A Kaua‘i man is facing a 47-count federal indictment for allegedly bilking 140 clients of $16 million in an investment scheme, according to an Associated Press report.
David E. Ruskjer, 58, of Po‘ipu, was charged Wednesday with 27 counts of money laundering, 12 counts of mail fraud, five counts of wire fraud and three counts of currency structuring in an indictment based on an Internal Revenue Service investigation.
The indictment says Ruskjer operated Ruskjer & Associates and “Dave’s Investment/Loan Program” from an apartment at Prince Kuhio Resort in Kukui‘ula.
It contends Ruskjer invested about $8 million and lost over $2.5 million in options trading.
It also says he spent “significant sums” enriching himself, including the purchase of another Prince Kuhio Resort apartment, a 1-bedroom unit late last year for over $500,000.
He faces a maximum of 320 years in prison if convicted on all the charges.
Ruskjer earlier was charged with fraud and violation of federal securities law by federal investigators, according to a federal court filing and a Securities and Exchange Commission press release.
In the complaint alleging fraud and violations of federal securities and exchange laws, Ruskjer faces many of the same charges he was indicted for Wednesday, including promising investors returns of 3 percent to 5 percent on their investments.
The court filing said he used the money to buy himself a condominium unit for $523,466 (Prince Kuhio Resort No. 201, according to Hawai‘i Information Service data), two motorcycles for $10,000, and nearly $1 million in ATM cash and debit-card purchases, and lost around $2.6 million in the stock market.
He used some of the money he got from later investors to pay off earlier ones, in what is often called a Ponzi scheme, according to the earlier court document.
It was unknown at press time whether Ruskjer has been arrested yet, but a summons has been issued for him to appear in federal court.
A pre-trial conference has been set for Aug. 24.
Ruskjer is accused of fraudulent and unregistered offering of securities between September 2004 and December 2008.
Attorneys with the federal Securities and Exchange Commission are asking the Hawai‘i U.S. District Court to mandate that Ruskjer “disgorge all ill-gotten gains,” or pay all the money back, and pay civil penalties and interest as well.
The only reference to Ruskjer in state-court documents involves his 1996 divorce from his wife, Jacquelyn Elaine Ruskjer.
Public documents indicate Ruskjer and his wife, Mariko Ruskjer, are owners of Prince Kuhio Resort No. 201, at 5051 Lawa‘i Rd., which they purchased in October 2008 for $520,000.
The woman answering the door at that apartment Monday said Ruskjer does not live there. She did not identify herself.
Ruskjer is a self-employed computer consultant, the SEC press release states.
The SEC’s complaint alleges that Ruskjer induced investors to purchase his promissory notes by misrepresenting his unsuccessful options trading and his use of their funds.
The SEC asserts that Ruskjer claimed to have a safe and non-speculative, options-trading strategy that made a monthly net profit of 5 percent to 5.5 percent, from which he promised to pay investors, depending on the time period and investor, a 3 percent to 5 percent monthly return.
According to the SEC’s complaint, Ruskjer’s securities trading from 2004 to 2008 sustained an average monthly loss of 5.8 percent and a net loss of $2.6 million.
Ruskjer used only $7.9 million of the $16 million entrusted to him by investors to trade securities, $5.5 million to pay fictitious securities trading profits to investors, and most of the remaining funds for personal expenses, such as $523,466 to buy a condominium, $112,000 on cash withdrawals, and $743,000 on debit-card purchases, the SEC complaint alleges.
The SEC’s complaint charges Ruskjer with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, the securities registration provisions of Section 5(a) and 5(c) of the Securities Act, and the broker-dealer registration provisions of Section 15(a) of the Exchange Act.
The complaint seeks a permanent injunction, disgorgement of ill-gotten gains, and a financial penalty against Ruskjer.
Ruskjer’s listed telephone number has been changed or disconnected, so further efforts to reach him for comment were unsuccessful by press time.
