Deerfield Man, 2 Others Swindled $3.9M From Investors: Feds

DEERFIELD, IL — A Deerfield man is accused of being part of a group that reportedly swindled millions from investors, including a children's charity. Lee S. Rose, 82, of Deerfield, and two others are accused of federal fraud for swindling six investors of $3.9 million.

Rose, along with Edward L. Wooten, 51, of Macon, Georgia, and John L. Krcil, 55, of Hanover, Minnesota, claimed to work for a Wyoming investment company called Black Lion Investment Partners, Inc. All three were charged with wire fraud and interstate transfer of money taken by fraud. Wooten and Rose were also charged with money laundering and making false statements. Wooten faces a charge of making false statements to the FBI, while Rose is charged with making false statements to a federal judge, the FBI, and the U.S. Securities and Exchange Commission.

According to an indictment unsealed Thursday in U.S. District Court in Chicago, starting in 2019, the trio falsely suggested to investors that they could earn substantial returns by participating in so-called "private placement" trading programs involving "investment grade fixed income securities" of "top-rated" banks or financial institutions.

The defendants would then fraudulently claim their trading programs yielded multi-million-dollar investment returns within short periods of time, and that investor funds would be returned if the programs failed to perform within 60 days. The charges allege that the defendants failed to use all investor funds to conduct trades, did not pay any trading profits to investors, and did not return all investor funds as promised, according to the indictment.

Instead, the defendants would convert investor funds to their own use and benefit. As a result, six investors, including an Oklahoma children's charity, suffered losses totaling approximately $3,905,000.