Lawsuit says Pasco investment company is a Ponzi scheme

The state Attorney General's Office got a judge to shut down a Pasco investment company this week, alleging that Botfly LLC is really a multimillion-dollar Ponzi scheme.

A lawsuit filed in Pasco circuit court says the company, run by David Lewalski of Gainesville and Jon J. Hammill of St. Petersburg, promised investors a return rate of 10 percent a month, far beyond typical returns in the current economy.

That promise is what raised investigators' suspicions.

The suit says Botfly collected some $23 million from 550 investors in Florida and elsewhere beginning in January 2008. Corporate records show a business address on Clocktower Parkway in Bayonet Point.

Only $11 million went back to investors in principal and interest payments, the suit says. The rest, Lewalski and Hammill took for themselves.

Their expenditures, according to the lawsuit:

• $616,000 by Lewalski on "high-end automobiles."

• $155,000 by Lewalski on luxury hotels.

• $244,000 by Lewalski on retailers including Gucci, Cartier and Hermes of Paris.

• $475,000 by Lewalski on private jets.

• $45,000 on cosmetic and dental expenses.

• $345,000 in cash withdrawals by Lewalski.

• $1.18 million in payments from Lewalski to Hammill.

Neither could be reached Friday.

The court injunction freezes all of Botfly's assets, which totaled almost $4 million as of February. It also prohibits Botfly from soliciting new investments and appoints a receiver to protect remaining assets "so that investors might be able to recover as much of their original investments as possible," according to a news release from the Attorney General's office.

The botfly, the release notes, is an insect whose larvae burrow under the skin of mammals and eat their flesh until they mature into an adult fly.

Molly Moorhead can be reached at moorhead@sptimes.com or (727) 869-6245.

Lawsuit says Pasco investment company is a Ponzi scheme 04/02/10 [Last modified: Friday, April 2, 2010 7:27pm]

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...