In addition to losing money on trades, Scronic allegedly used investor money for personal expenses.

A hedge fund manager from Westchester County was arrested on Thursday and charged by federal prosecutors with security fraud and wire fraud stemming from a $19 million Ponzi scheme through the Scronic Macro Fund.

Specifically, the SEC alleged in its complaint that since April 2010, Scronic engaged in a fraudulent scheme that netted almost more than $19 million from 45 investors.

Prosecutors said he also spent $2.9 million on himself over 5-1/2 years, including $180,000 annually on credit cards, fees for beach and country club memberships, and mortgage payments for a vacation home near Stratton Mountain in Vermont.

Scronic is charged with one count of securities fraud and one count of wire fraud.

According to court papers, Scronic lured investors by claiming he has an impressive track record and that his investments are very liquid. It wasn’t immediately clear whether he has hired a lawyer. The alleged fraudster spent $500,000 a year of investor cash on his personal lifestyle since 2012, including almost $150,000 a year on his rented Austin Hill Road home that, according to, featured a pool, a tennis court and an eight-seat viewing room. Nearly half the households had annual incomes exceeding US$200,000.

USA prosecutors claim that Scronic, who has degrees from Stanford University and the University of Chicago, committed mail and wire fraud by misleading investors about the fund’s performance. In reality, the feds said the fund lost money in 28 of the 29 quarters of its operations, with a total net loss of about $15.7 million before commissions. “In other instances, Scronic sought to obtain additional investment funds from new and existing investors in order to satisfy redemption requests from other investors”.

A graduate of Stanford University who had a master’s degree from the University of Chicago, Scronic ran the scam out of his Pound Ridge home, according to the government.

Investments in Scronic’s phony fund ranged from US$23,000 to US$2.4m.

A spate of investor redemptions led to the scheme’s collapse. He instead has told these investors that the Fund would pay redemptions only at quarter end, that he was too busy and preoccupied with a relative’s medical condition to pay redemptions, and that he was unavailable to pay redemptions because he was on vacation. In some cases, he simply ignored redemption requests, they said.