FORT WORTH, Texas (AP) — A California man has pleaded guilty in Texas federal court to two counts of securities fraud for running a more than $40 million Ponzi scheme.
Jeffrey Sykes entered his guilty plea during a court hearing Friday in Fort Worth.
Prosecutors say Sykes used his Redlands, Calif.-based private equity company to solicit investors to participate in a T-Bill trading program.
Authorities say a Westlake, Texas man helped Sykes in his scheme by forming a company in 2007 to solicit investors.
According to prosecutors, investors' money was used to pay for personal expenses or was placed in ventures that investors were unaware of.
Prosecutors say investors ended up losing about $12 million.
Sykes faces up to five years in prison for each securities fraud count. His sentencing is set for April 26.