Elk Grove Village trader sentenced to 8-year prison term
An Elk Grove Village man accused of stealing millions from financially devastated investors, some of whom trusted him with their life savings, admitted his guilt.
Kevin G. Carney was sentenced Wednesday in Cook County to eight years in prison.
He pleaded guilty to theft, securities fraud and financial exploitation of an elderly person. As part of his sentence, Carney was ordered to pay more than $1.3 million restitution to his victims.
The 49-year-old man faces similar charges in a 60-count indictment in DuPage County, where 28 would-be investors claimed he scammed them out of another $2.4 million. But in federal bankruptcy and secretary of state administrative complaints, as much as $10 million has been stolen from more than 130 people from across Illinois' suburbs, out of state and other countries.
In October 2008, secretary-of-state officials closed down his Elk Grove Village office and seized Carney's bank accounts. He bilked four more clients out of $110,000 in the following two months, officials said.
Police arrested Carney one year later after a lengthy investigation.
Carney told his investors that he had developed a day trading software program that allowed him to pre-empt stock market investors, giving him a three-minute edge to buy and sell. He promised a 15 to 20 percent monthly profit, according to authorities.
"He sent account statements to his clients via e-mail, which several victims accessed," said Edward C. Snow, a senior assistant Illinois attorney general, in court documents. "The statements falsely showed earnings on their investments of 15 to 20 percent per month. The indication of a positive return encouraged several victims in DuPage County and elsewhere to make further investments."
After Carney's personal assets were seized, authorities say they returned about 5 cents on the dollar to the victims. The duped investors also are trying to recoup some of their losses through a separate federal bankruptcy proceeding.
In a classic Ponzi scheme, similar but smaller than that operated by swindler Bernie Madoff, Carney admitted in Cook County to using significant amounts of investors' money to pay interest to other clients, falsely portraying these payments as proceeds from investments.
"I'm the biggest loser," a Naperville woman told the Daily Herald after his arrest.
She and her husband lost as much as $784,000, according to the DuPage County indictment. The woman, who asked not to be publicly identified, said she lost her life savings after trusting the smooth-talking Carney.
Carney had a clean criminal record. The married father grew up in Granite City and is a lifelong Illinois resident. He is scheduled to appear Friday before DuPage Circuit Judge George Bakalis.
Prosecutors also indicted one of Carney's investors, Craig Gutowsky, 44, of Cary, on charges alleging theft, theft by deception and securities violations. He did not aid Carney, but instead is accused of persuading others to allow him to invest for them while keeping their money for himself. Gutowsky is due in court Sept. 16.
"This is fitting punishment for the fraudulent acts that Mr. Carney committed to enrich himself at the expense of clients who trusted his work and alleged expertise," Illinois Attorney General Lisa Madigan said in a Thursday statement announcing the eight-year Cook County prison sentence.