OAKLAND -- A San Ramon investment trader was charged with nine counts of mail fraud Friday after an indictment from a federal grand jury alleging he never invested $1 million that clients gave him for day trading.
Alfred John Schlette, 59, was arrested Thursday and appeared in an Oakland court Friday to answer to charges that he defrauded more than 10 investors of over $1 million, United States Attorney Benjamin B. Wagner said. The indictment alleges Schlette told his clients they could invest funds with him, and that they would be pooled and used for day trading.
In actuality, Schlette was spending the money on personal expenses and never invested any of it, Wagner said. Schlette would also send his investors monthly statements showing a significant return on each individual's investment.
The Federal Bureau of Investigation and the Contra Costa County Sheriff jointly investigated Schlette, and the case is being prosecuted by Assistant United States Attorney Jared C. Dolan, from the Eastern District of California. The United States Attorney's Office for the Northern District of California was recused from the case.
Schlette faces a maximum penalty of 20 years in prison and a fine of $250,000, Wagner said. The actual sentence will be determined at the discretion of the court, who will take into account a number of variables.