Valpo businessman charged with stalking whistleblower
By Teresa Auch Schultz email@example.com March 25, 2014 8:36PM
Updated: April 27, 2014 6:35AM
A Valparaiso investor spent the past four years making his clients happy, sending them report after report showing how their money — more than $1 million total — kept growing by tens of thousands of dollars in his special investment fund, according to court records.
But those reports were all lies, the FBI said, and William D. Cantrell Jr. was actually pilfering most of the money, much of which he gambled away. He now faces criminal charges in U.S. District Court in Hammond of stalking the client, Michele Santangelo, who first brought the case to the FBI’s attention.
Cantrell is being held in the San Diego Central Jail, where a hold has been placed on his release by the FBI. He is charged with one count each of burglary, possessing a concealed weapon and stalking in San Diego Circuit Court. His next court hearing in San Diego is set for April 2. It was unclear Tuesday evening whether extradition proceedings have started to bring Cantrell to Northwest Indiana or if any court hearings in Hammond have been set.
A probable cause affidavit filed Tuesday brought new details of this case to light, including how the FBI started investigating Cantrell in October, after the agency became aware of a lawsuit Santangelo, who lives near San Diego, had filed in August against Cantrell. In that suit she claimed he defrauded her of $787,000 she invested with him at the beginning of 2011.
Cantrell responded to the suit by emailing Santangelo’s employer to tell the organization that he was having the IRS investigate them, that Santangelo told him confidential information and that the organization should fire Santangelo, according to the affidavit. He went so far as to tell her employer that they should post on Facebook that she had been fired, the affidavit said.
Then in the early morning hours of March 19, he was found outside Santangelo’s home after allegedly having tried to use a crowbar to break into her house, according to the affidavit. Police also found a knife and gloves on him.
Cantrell allegedly told FBI agents Friday that his investing fund, Dragon Fund, was nearly broke. He also admitted that he lied to multiple investors by sending them falsified quarterly reports that claimed the investors were making money.
“These statements were sent out when the Dragon Fund did not have any money left,” the affidavit said.
An audit by the FBI shows clients had invested $1.1 million into the fund and that Cantrell had invested $781,143 of that money through an online brokerage system that saw a net gain of $59,100.
However, $840,243 was moved to Cantrell’s personal account, and another $234,580 was lost through multiple cash withdrawals.
The audit continued with Cantrell’s personal account and found he had spent $333,045 on casinos and $160,779 on living expenses, along with taking out $169,101 in cash withdrawals.
The Dragon Fund account had a balance of $40 in September, and Cantrell’s personal bank account was at $21 by September 2012.
The FBI interviewed other investors and discovered that another client, identified as J.L., grew concerned about her $80,000 after hearing about Santangelo’s lawsuit and asked Cantrell in September or October for $50,000 of it. He at first put her off by saying he couldn’t withdraw money from the fund in the middle of a quarter and then tried to tell her she should take the money out of other investments. He finally told her earlier this month he couldn’t pay her because the FBI had frozen his assets.
One other client had to take money out of the fund when she became sick at some unknown time. Cantrell paid her the principal but no interest, the FBI said she told them. Other clients told the FBI that their reports showed them earning money.
“All investors were happy with their investment, as they believed they were earning a lot of money,” the affidavit said.
The FBI also found that the Dragon Fund was not a “registered or legitimate hedge fund.” Cantrell’s name did not come up in a list of registered brokers on the Financial Industry Regulatory Authority’s website.