Sunil Sharma of Carlsbad pleaded guilty yesterday (June 2) of scamming local investors of more than $6 million through a fraudulent day-trading strategy.
Through one of his companies, Gold Coast Holding, Sharma told investors they could make safe returns as he invested half the money in bonds of Brazil, Russia, India, and China (called BRIC bonds), and the other half in gains from his day-trading.
He sent his investors false quarterly statements indicating that their investments were doing well.
Actually, according to the U.S. Attorney's office, he never bought the BRIC bonds or any kind of bonds. Instead, he pursued stock-option strategies through Gold Coast and another company he established, Safe Harbor Tax Lien Acquisitions. But as his early successes vanished, he began a Ponzi scheme, paying early investors with funds from later investors, as he continued to speculate in options, hoping to recoup his losses.
Sharma ran out of funds in January of this year. He will be sentenced for wire fraud on August 24.