File this one under strangest (alleged) fraud stories of
On December 19th, fund manager Wilheon Chay was charged in federal court in Manhattan on three charges of fraud relating to the alleged theft of over $2 million from investors in his 4X Funds. In a somewhat bizarre twist, it turns out Chay spent more than $150,000 of the stolen money to freeze his wife’s body.
Chay left the country and moved to Lima, Peru in October 2011 as the fraud investigation moved forward, and has not returned to the U.S. since.
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Statement from U.S. attorney on the case
Preet Bharara, the U.S. Attorney for the Southern District of New York noted: “As alleged, Whileon Chay deceived investors about the commodities pools he managed, claiming to be a successful trader when he in fact was losing millions and misappropriating investors’ money for his own use. Although he has fled the country, these charges against him will persist and so will our efforts to bring him back to face them.”
Used stolen client money to freeze his wife’s body
Federal authorities also pointed out that Chat used the stolen funds to support a lavish lifestyle, including spending more than $150,000 in order to have his wife who died in 2009 cryogenically frozen.
The Cryonics Institute describes cryogenic freezing as a method for preserving people in order to hopefully revive them at some point in the future.
Theft from clients? Further details on the case
The federal indictment alleges that starting in 2007, Chay solicited investors for commodities pools he managed that were supposedly involved in foreign exchange trading. He collected over $5 million from investors, claiming annual returns of 24% and stating that “[t]here is no risk in this activity” (note most of our readers would rightly suspect “risk free” products offering 24% CAGR returns).
It turns out that Chay actually lost over $2 million in forex and other commodities trading, and also misappropriated a large amount of the remaining investor funds for personal use, including buying several luxury cars, traveling and to having his dead wife cryogenically frozen.
The appears on he docket if U.S. District Judge Kimba M. Wood.
See some court documents from PACER and Southern District of NY below