FBI arrests Wilkinson for investment fraud scheme

SHARON — FBI agents from the New Haven and Chicago field offices arrested Alvin Wilkinson, a Sharon resident, on Wednesday, Jan. 18, on four counts of fraud. 

He is accused of operating a “multi-million dollar fraud scheme that swindled approximately 30 individuals, including victims who reside in the Chicago area,” according to the a press release from the U.S. Attorney’s Office for the Northern District of Illinois.

The arrest was made in Lakeville, according to Garrett Croon, the FBI’s Chicago media coordinator.

An indictment was returned on Tuesday, Jan. 17, by a federal grand jury. It was unsealed on Wednesday morning.

If he is found guilty, the government will  seize $13 million in cash from Wilkinson as well as his 13-plus-acre property in Sharon, which is known as Indian Lake Farm and is on the Millerton Road. 

The U.S. Attorney’s Office is accusing Wilkinson of running a Ponzi scheme, claiming he lied to investors about how much money they were making from investments they’d made with his two companies, and even going so far as to have an accountant create fake K-1 tax documents for the investors. 

According to the indictment, he did not invest the money he took from as many as 30 individuals, many of whom live in the Northwest Corner.

The indictment claims that Wilkinson would use money from new investors to pay the original investors in his funds, creating the illusion that they were making a profit. 

The rest of the money he collected was spent on personal expenses, including the “approximately $7,000 monthly mortgage payment on Wilkinson’s home in Connecticut, credit card bills, personal real estate and income taxes, a new car, pool cleaning services and approximately $55,000 in rent for Wilkinson’s apartment in San Juan, Puerto Rico,” according to the indictment.

Wilkinson is being tried in Illinois because he ran his business, Chicago Index Partners, out of Chicago and because he is a former member of the board of directors of the Chicago Board Options Exchange. 

The indictment says that, “The funds were organized as Illinois limited partnerships.” The accountant who issued the K-1 tax forms with false information (provided by Wilkinson, according to the court documents) is also based in Chicago.

A press release from the U.S. Attorney’s Office says that Wilkinson’s fraudulent activities began “no later than 1999 and continued until at least May 2016.”

According to the release, “Wilkinson was the sole officer of his funds and had exclusive authority to manage their operations. 

“Investors in the funds included Wilkinson’s friends, acquaintances and former colleagues. 

“Wilkinson claimed he would trade a portfolio of financial instruments on their behalf, including options and futures, and that his trading strategy made money regardless of market conditions.

“In reality, Wilkinson did not maintain any trading accounts for the funds, and he did not use investor funds to trade in options and futures.”

Wilkinson has been charged with three counts of mail fraud and one count of wire fraud. He will be tried in Chicago. Each count of the indictment could be punishable with up to 20 years in prison. No court date has been set yet.