Downtown Ponzi Scheme Busted

Federal agents raided the Water Street offices of John M. Donnelly today, Lindsay Barnes writes in The Hook, seeking evidence to support the indictment brought against him for stealing $11M from 31 investors in a Ponzi scheme. Tower Analysis Inc., located in the old train station next to the amphitheater, had agents descend on it and haul off evidence this morning. Donnelly approached some friends a decade ago, had them make small investments, and then used that money to raise more money. Each round brought more money, which he used to pay faux investment income to lower-level investors. (And if you can figure out how that practice can possibly end in anything other than ruin, you might have a future in running financial scams.) Along the way he made a million bucks in the past three years, claiming, awesomely that “using his background in astrophysics, Donnelly developed a proprietary model of financial markets using algorithms derived from the quantification of a fractal wave frequency model which he named Blue Logic.” See the SEC complaint for the nitty-gritty.

Incidentally, Donnelly’s wife is Deborah Donnelly, the fundraiser for UVa’s Curry School of Education. She’s not been accused of any wrongdoing, but given the nature of her job, that’s got to be awkward.

8 Responses to “Downtown Ponzi Scheme Busted”

Comments are currently closed.