California man used $23M in investor funds to live lavishly, bought cars and Chicago condo: prosecutors

A California man has been sentenced to seven years in prison for orchestrating a scheme that defrauded investors of $23.1 million, which he used to fund an extravagant lifestyle.

Sean Grusd, 32, from Los Angeles, ran three investment funds he claimed would focus on private financial technology companies, according to prosecutors. He convinced more than a dozen victims to invest by offering misleading information about his funds' supposed past successes.

Starting in 2021, Grusd marketed his funds using false claims, including that one of them had been an early investor in well-known startups like Instacart, Coinbase, and Shippo. He also falsely claimed to be a Harvard Law School graduate and that he managed the portfolio of a major investment firm's CEO, prosecutors said.

His elaborate scheme convinced victims, some of whom invested significant portions of their life savings, to entrust their money to him.

However, instead of investing the funds as promised, Grusd funneled the money into his personal accounts and spent it on luxury items, such as Porsche and Tesla cars, high-end condos in Chicago and Montreal, as well as on lavish travel and entertainment.

Assistant U.S. Attorney Corey Rubenstein described Grusd's actions as "an appalling stream of deliberate choices" that caused immense financial harm to the victims.

Grusd pleaded guilty to wire fraud last year in federal court in Chicago. In addition to the prison sentence, he was ordered to pay more than $21 million in restitution to his victims.