A San Ramon man faces as much as 20 years in prison and $250,000 in fines after pleading guilty to mail fraud in federal court on Monday.
Alfred John Schlette, 40, bilked investors out of more than a million dollars in a scam that promised big returns, according to U.S. Attorney Benjamin Wagner.
According to court documents, from 2007 to 2011 Schlette told investors that he was a day-trader, making small profits and withdrawing them on a day-to-day basis.
He guaranteed a 10-15% profit on their investment, and convinced more than 10 people to invest funds totaling more than $1.6 million with him.
Schlette, however, never invested any money in the stock market.
According to court documents, bank records showed that Schlette spent all of the funds provided by investors on personal expenses and to pay returns to prior investors. While he had opened an online investment account, that account was never used to make a single trade.
This case is the product of an investigation by the FBI and the Contra Costa County Sheriff's Office.
Schlette remains free on $50,000 bond. He is scheduled to be sentenced by Chief United States Judge Claudia Wilken on June 16.
While he faces a maximum statutory penalty of 20 years in prison plus fines, the actual sentence will be determined by the court after consideration of federal sentencing guidelines and other factors.