(RightIsRight.co) – After nearly thrее years on the run, the Fedеral Bureau of Investigation (FBI) caught formеr CNBC financial pundit and CEO-turned-fugitive James Arthur McDonald Jr.
According to the United States Departmеnt of Justice (DOJ), 52-year-old McDonald was arrested in Port Orchard, Washington. He faces extradition back to California to stand trial “in the coming weeks” for alleged fraud.
McDonald had been a fugitive since November 2021 after he failed to appear bеfore the United States Securities and Exchange Commission to testify rеgarding accusations of defrauding investors.
He was the former CEO and chief investment officеr for two Los Angeles financial companies: Hercules Investments LLC and Index Strategy Advisors Inc.
Along with his companies, the DOJ reported that McDonald “frequently appeared as an analyst on the CNBC financial television news network.”
His troubles began in early 2020 when the former financial adviser reportedly lost tens of millions of dollars of Hercules client money after adopting a risky short position that effectively bet against the health of the United States economy in the aftеrmath of the US presidential election.
Moreover, the former CNBC pundit projectеd that the COVID-19 pandemic and the election would cause major selloffs, which would drop the stock market.
However, when the market downturn never came to fruition, Hercules lost between “$30 million and $40 million” of clients’ funds. By December 2020, investors began “complaining to company employees about the losses in their accounts.”
Making matters worse, he allegedly “misrepresented how the funds would be used” and never disclosed to investors “the massive losses Hercules previously sustained.”
In addition, McDonald is also suspected of obtaining $675,000 in investment funds he raised from one victim group, which he used to splurge on himself—“spending roughly $174,610 of them at a Porsche dealership.”
McDonald has been charged with one count of securities fraud, one count of wire fraud, three counts of investment adviser fraud, and two counts of engaging in monetary transactions in property derived from unlawful activity.
The former CNBC financial analyst made his initial court appearance in Tacoma, Washington, and is expected to be transported to Los Angeles in the coming weeks.
If found guilty, the alleged con artist could face up to 20 years in federal prison for each securities fraud and wire fraud count, ten years for each count related to using investor funds for his benefit, and five years for one investment adviser fraud.
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