A Chicago financial advisor is facing up to 20 years in prison after pleading guilty Friday to a federal charge that he swindled his investors and family members out of more than $2 million.
Vishal Savla, 37, pleaded guilty to a single count of wire fraud, according to a statement from the U.S. Attorney’s Office for the Northern District of Illinois.
While he was running VCAP LLC, a Chicago-based investment fund that was said to trade in equities, options and futures contracts, Savla told clients that a computer trading error led to major losses, prosecutors said. He admitted in federal court that poor trading actually caused the losses.
From 2014 until earlier this year, Davla raised about $2.3 million from investors after promising substantial returns, prosecutors said. His investment fund was “largely unsuccessfully” during that stretch, losing more than 95 percent of its investments in 2014 and most of 2016.
[NATL] Top News Photos: Pope Visits Japan, and More
Nevertheless, Savla kept soliciting and accepting new investments while sending clients phony account statements that showed large profits instead of substantial losses, according to his plea agreement.
In December 2016, Savla claimed that a keyboard input error commonly known as a “fat finger trade” caused his fund to drop by roughy 90 percent in a single day, prosecutors said. As part of his plea deal, Savla admitted that there was no such error, and that trading losses spurred the dramatic decline.
Savla also acknowledged that he borrowed cash from family and friends to repay his investors, the plea agreement said. One family member loaned him a half million dollars after learning of his purported “fat finger” mix-up. He used the infusion to repay some of his investors.
In addition, Savla admitted to using $260,000 of investor money to finance his living expenses, prosecutors said.
Savla’s sentencing was scheduled for Jan. 9, prosecutors said. He faces up to two decades in prison.