Investment Fraud: DAVID BLAINE WELLIVER Sentenced For Defrauding Investors in The Dblaine Fund

Financial Fraud
DAVID BLAINE WELLIVER Sentenced For Defrauding Investors in The Dblaine Fund

Investment Advisor Sentenced to Five Years for Defrauding Investors of $1.725 Million

The United States Attorney’s Office for the District of Minnesota announced the sentencing of DAVID BLAINE WELLIVER, 56, to five years in prison for defrauding investors in the Dblaine Fund of $1.725 million. WELLIVER pleaded on July 13, 2016, to one count of . He was sentenced today before Senior U.S. District Judge Paul A. Magnuson in U.S. District Court in St. Paul, Minn.

According to the defendant’s guilty plea, WELLIVER was the CEO and CIO of Dblaine Capital, LLC, an advisory company he founded in Buffalo, Minn. In September 2010, WELLIVER negotiated an agreement with Lazy Deuce Capital Company, LLC (Lazy Deuce), to purportedly finance the merger between Dblaine Capital and other mutual funds.

According to the defendant’s guilty plea, WELLIVER, in 27 separate transactions between October 2010 and May 2011, borrowed a total of $4 million from Lazy Deuce. Aside from a $95,000 payment to acquire the assets of a mutual fund, WELLIVER did not use any of the other proceeds of the Lazy Deuce loans to acquire mutual funds as he had represented to Lazy Deuce. Instead, WELLIVER diverted over $500,000 in proceeds from the Lazy Deuce loans to his own personal use, including for landscaping and interior decorating at his personal residence, to purchase land adjacent to his personal residence, to buy a personal vehicle, and to pay for his son’s college tuition.

According to the defendant’s guilty plea, between December 16, 2010, and April 15, 2011, WELLIVER caused $1.725 million in Dblaine Fund investors’ to be invested in a shell company formed by several Lazy Deuce principals, called Semita Partners LLC (Semita). At the time WELLIVER made the investments in Semita, he knew that Semita was a shell company formed by principals of Lazy Deuce – the same company from which Dblaine Capital had borrowed money – and that Semita had no operations. On December 31, 2010, in order to meet a series of redemptions in the Dblaine Fund, WELLIVER liquidated nearly all of the stocks held by the Dblaine Fund. Following this liquidation, the Dblaine Fund’s only holdings consisted of worthless Semita shares and cash held in a money market .

This case was the result of an investigation conducted by the United States Postal Inspection Service, the , and the Internal Revenue Service – Investigation.

This case was prosecuted by Assistant United States Attorneys Kimberly A. Svendsen and Benjamin F. Langner.
Defendant Information:

DAVID BLAINE WELLIVER, 56
Buffalo, Minn.

Convicted:
• Securities fraud, 1 count

Sentenced:
• Five years in prison
• Three years of supervised release
• Restitution of $2,161,079.83

Leave your vote

3867 points
Upvote Downvote

Total votes: 0

Upvotes: 0

Upvotes percentage: 0.000000%

Downvotes: 0

Downvotes percentage: 0.000000%

FraudsWatch
About FraudsWatch 995 Articles
You've been defrauded? FraudsWatch.com tries to help as to denounce embezzlement, theft or if your identity has been compromised. I put at your disposal example, guide and guidance about fraud, scams and identity theft.

1 Comment

Leave a Reply

Your email address will not be published.


*