6-year sentence imposed in Folsom Ponzi scheme that took in $80 million

Published: Friday, Feb. 14, 2014 - 8:50 pm

The right-hand man in one of the biggest Ponzi schemes in Sacramento history received a six-year prison term Friday.

Kenneth Kenitzer, 70, of Pleasanton was sentenced in U.S. District Court in Sacramento for his role in an investment scam that took in more than $80 million from customers. Kenitzer, who pleaded guilty to fraud in October 2009, was sentenced by Judge Garland E. Burrell Jr.

Kenitzer was an officer in Equity Investments Management & Trading, a Folsom firm that claimed its computerized trading program would deliver profits to customers of 36 percent a year. The scheme was shut down five years ago, and indictments soon followed.

The principal in Equity Investments, Anthony Vassallo, was given a 16-year sentence last June. Vassallo pleaded guilty and then changed his mind, saying he had been pressured by prosecutors and his own lawyer to admit his guilt. Burrell called Vassallo a “liar” and made the guilty plea stand before imposing the sentence.

By contrast, prosecutors said Kenitzer cooperated with investigators early on. His guilty plea came seven months after Equity Investments was shuttered.

“Kenitzer appeared to grasp that he had been a part of a significant fraud and wished to work toward making things right,” according to a presentence report from Assistant U.S. Attorney Jean Hobler.

Hobler said Kenitzer, while aware that the trading program wasn’t delivering investment returns as advertised, apparently didn’t realize the depth of the problem. “He did not necessarily know the scope of the lies,” she wrote.

Burrell also sentenced Kenitzer to three years of supervised release after his prison term ends.

The U.S. attorney’s office said investors entrusted Vassallo and Kenitzer’s firm with $83 million between 2006 and 2008. Many customers got their money back, but investors’ losses came to $43.3 million, according to court records.

Call The Bee’s Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

Read more articles by Dale Kasler

Sacramento Bee Job listing powered by Careerbuilder.com
Quick Job Search
Sacramento Bee Jobs »
Used Cars
Dealer and private-party ads


Price Range:
Search within:
miles of ZIP

Advanced Search | 1982 & Older