California Man Sentenced to 7 Years for $23.1 Million Fraudulent Investment

Sean Grusd sentenced to 7 years for a $23.1 million investment fraud scheme, defrauding investors through fake business ventures.Photo byLarry FarronUnsplash

Sean Grusd, 32, of Los Angeles, was sentenced today to seven years in federal prison for orchestrating a fraudulent investment scheme that defrauded investors out of $23.1 million, the U.S. Attorney’s Office for the Northern District of Illinois announced.

From February 2021 through December 2022, Grusd devised and carried out a scheme to deceive investors in Dylan Ventures LLC, November Acquisitions SPV LLC, and December Acquisitions SPV LLC (collectively known as “the Grusd Entities”), according to the department.

He falsely promised that the victims' funds would be used to invest in privately owned businesses. Instead, Grusd misappropriated the money to pay for personal luxuries, including cars, vacations, and real estate, the department stated.

Grusd provided his victims with forged documents, including fake stock certificates. He falsely claimed that November Acquisitions had purchased $50 million in shares from "Company A" and that December Acquisitions had acquired $100 million in shares from "Company B."

In reality, neither entity made any purchases, according to the department.

In one instance, Grusd gave a victim a fabricated bank statement showing that December Acquisitions had $133 million in its account, when in fact the balance was zero.

These fraudulent documents were part of a broader pattern of deception designed to gain investor trust, the department revealed.

Beginning in 2021, Grusd created three funds that he claimed would invest in private financial technology companies.

The department stated that he distributed marketing materials full of falsehoods, claiming that one of his funds was an early investor in high-profile startups like Instacart, Coinbase, and Shippo.

He also falsely represented himself as a Harvard Law School graduate and claimed to manage the personal portfolio of a CEO of a major investment firm, all to persuade more than a dozen victims to invest $23.1 million with him.

Instead of fulfilling these promises, Grusd transferred the funds to his personal bank accounts and spent lavishly on luxury cars like Porsche and Tesla, as well as high-end condos in Chicago and Montreal, the department stated.