Daniel Spitzer, 51, of the Chicago suburb of Barrington, was indicted Thursday on eight counts of mail fraud, the Chicago Tribune reported.
He claimed to control 12 investment funds that he said had never lost money. But he actually invested only a third of the money raised from 400 investors and used the rest to pay off other investors, the indictment alleges. As of June 30, 2009, the funds held only about $4 million in bank accounts, though Spitzer had told clients they were worth about $250 million, authorities say.
"Daniel Spitzer made Ponzi-type payments to investors, made and caused to be made misrepresentations about the status of investments, and took other steps to lull investors into false sense of security that their investments were safe and profitable," the indictment states.
Spitzer could face 20 years in prison and a $250,000 fine if convicted.
Celebrity Families of 2014 [PHOTOS]