An arrest warrant was issued Wednesday for David Hernandez, the missing founder of a sports internet venture, as the U.S. Attorney’s Office charged him with mail fraud in connection with an alleged Ponzi scheme, Crain's Chicago Business reported.
Hernandez was reported missing on Monday after federal regulators accused him of securities fraud. The Chicago Tribune reported he contacted one of his former attorneys Wednesday morning to say that he is staying at a Downers Grove hotel.
CBS2 Chicago also reported that Hernandez had contacted his family with the same line -- safe in a hotel in the suburbs. Police said they doubt Hernandez is telling the truth and "might just be throwing people off."
Hernandez ran a Ponzi scheme that illicitly siphoned millions from investors in 12 states to pay himself, his family and start-up costs for the sports-talk Web site, according to a civil lawsuit filed Monday. He promised the investments would earn returns up to 16 percent a month, they said.
"He told investors he had an extensive background in banking. What he didn't tell investors, we've alleged, is that his background in banking ended with a felony conviction for wire fraud," said SEC Asst. Regional Director John Sikora.
Like so many of the other veteren Chicago sportscasters at ChicagoSportsWebio.com, Chet Coppock said he should have known Hernandez was too good to be true.
"When all of a sudden checks bounced, and we realized there were no checks, for a while there was disbelief. Then we felt sold-out, betrayed, and now there's a great degree of anger," Coppock said.
Mike North was Hernandez's business partner in the Web operation until last Friday when Hernandez fired him. He said Hernandez always had an explanation for the financial problems.
"We always heard it was a banking error, it was a mistake," North said.
Borman was quoted by the Chicago Sun-Times as making statements to his wife "referencing his well being."
"It was enough to cause alarm with his wife," Bormann said.
ChicagoSportsWebio.com aired its final broadcast Tuesday evening, and some of those who worked there and helped build the station said they can't help but to partly blame themselves.
"Shame on us for not looking harder at what David Hernandez was all about," Coppock said.