David Braeger, a 57-year-old resident of Fox Point, Wisconsin, has been sentenced to 24 months in prison for orchestrating an investment fraud scheme that resulted in over $2.5 million in losses to investors. This announcement was made by Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin.
Court records reveal that Braeger had been barred by the Financial Industry Regulatory Authority (FINRA) from acting as a broker or associating with a broker-dealer firm. In 2017, he founded Blue Star Automotive Fund and sold limited partnership shares to twenty-seven investors, raising over $5.4 million under the pretense of funding an automobile dealership. However, Braeger misappropriated more than $2.5 million for personal use including luxury vehicles and legal fees. He also invested in ventures like purchasing Silver Spring House Restaurant and sponsoring a NASCAR driver.
Braeger's fraudulent activities extended beyond Blue Star Automotive Fund; he also stole $100,000 from another investor for a venture named IEF which was falsely claimed to fund litigation related to a Ugandan energy company.
U.S. District Judge Lynn Adelman highlighted the impact on victims during sentencing, stating that Braeger's actions were driven by "greed and self-aggrandizement." Besides his prison term, Braeger must pay restitution amounting to $2,535,103.19.
U.S. Attorney Haanstad remarked: “Mr. Braeger... used his background and connections to steal millions of dollars from over two dozen victims.” Special Agent Vincent R. Zehme emphasized the fraudulent nature of Braeger's actions which harmed consumers and financial integrity.
The investigation was conducted by the Federal Deposit Insurance Corporation Office of Inspector General following referral from the Wisconsin Department of Financial Institutions and prosecuted by Assistant U.S. Attorney Julie F. Stewart.