Yahoo News Former TV financial analyst arrested for fraud after years in hiding
After more than two years on the run, a former investment company CEO and TV financial analyst was arrested last weekend and will face federal fraud charges in Los Angeles.
James Arthur McDonald Jr. lied about things including his Harvard education and how he spent millions of dollars raised from clients, according to charging documents filed last year in U.S. District Court.
McDonald, who frequently appeared as a guest analyst on CNBC, misappropriated at least $675,000 from investors, including nearly $175,000 spent at a Porsche dealership, court documents said.
McDonald's lawyer did not respond to a request for comment.
McDonald lost between $30 million and $40 million after taking a risky short position that bet against the U.S. economy in the wake of the 2020 presidential election, prosecutors said.
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To pay his clients back and avoid disclosing the losses, McDonald raised more money by selling equity in his company and disguising how the proceeds would be used, the indictment says.
Court documents show that McDonald also misled people about his education. Despite making regular references to his economics degree from Harvard University, McDonald is a graduate of the Harvard Extension School, an open-enrollment institution.
Investigators found he took only one class related to economics while studying there.
McDonald has been considered a fugitive since November 2021, when he failed to appear before the U.S. Securities and Exchange Commission to face allegations that he defrauded investors, a release from the U.S. attorney’s office said.
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According to a criminal complaint, McDonald told a former romantic partner and business associate that he was going to “vanish” after the SEC subpoenaed him for testimony. Authorities located and arrested him this month at a residence in Port Orchard, Wash.
McDonald, former CEO of Hercules Investments LLC and Index Strategy Advisors, appeared in court June 17 and waived his right to a detention hearing in the Western District of Washington. He remains jailed pending his transfer to Los Angeles.
This story originally appeared in Los Angeles Times.
