Frommer pleads guilty to $12M investment scam
November 25, 2010
LOS ANGELES – A Southern California man who was once arrested in Aspen for writing bad checks pleaded guilty Tuesday to running a $12 million investment scam.
Prosecutors say Peter Frommer entered pleas in federal court to wire fraud, money laundering and failing to file taxes. He faces up to 33 years in prison.
Frommer arrived in Aspen in December 2006 and allegedly wrote a string of bad checks that led to his arrest. A dot-com entrepreneur from Malibu, he faced 11 counts of check fraud from creditors, ranging from the Hotel Jerome to his landlord, a lingerie retailer and two area baby sitters.
An indictment said that from 2004 to 2006, the 35-year-old Santa Barbara man ran an investment business that supposedly bought and resold office equipment from defunct companies.
The indictment said Frommer never bought any assets but used the money to repay some investors in a Ponzi-style scheme and the rest to fund a lavish lifestyle.
Authorities say more than 50 investors in several states were bilked.