Documents detail how banker allegedly spent swindled funds
Posted July 1, 2009 5:44 p.m. EDT
Updated July 1, 2009 7:12 p.m. EDT
Raleigh, N.C. — New details have surfaced about how a Raleigh banker accused of defrauding investors out of $12.3 million was allegedly spending the money.
William Wise, 58, operated Millennium Bank, which he billed as a St. Vincent-based unit of a Swiss bank.
The Securities and Exchange Commission against Wise and others, saying they were using the bank as a front for a Ponzi scheme that has stolen more than $68 million from 375 investors, including at least 12 in North Carolina.
Ponzi scheme, also known as pyramid schemes, rely on a steady flow of investors that allow those in charge to use new money to pay interest checks to older investors and keep them satisfied. Meanwhile, the people running the scheme skim money off all investments to finance their own lifestyle.
The SEC suit alleges Millennium Bank advertised certificates of deposit that guaranteed 7 to 9 percent returns in luxury lifestyle magazines and on its Web site. The returns were more than four times the interest rates offered on CDs by most commercial banks, authorities said.
In recently obtained by WRAL News, attorneys freezing Wise's assets indicate he spent $40,000 a month on interest for a private plane and $400,000 to pay off his Raleigh mortgage.
Among other expenses: Wise's wife in Raleigh was paid $12,000 a week, while an unknown number of female companions were each paid $6,000 to $10,000 a month.
About $5 million to $7 million was used to buy an estate in St. Vincent, where the bank was said to be based, and $1 million was spent on wine.
Investigators say there is no evidence Wise made any investments for the people who trusted him with their money.
No criminal charges have been filed in the case, but a federal judge has frozen Wise's assets, including all property in his million-dollar west Raleigh home, and turned them over to a receiver to be auctioned off to repay investors.
Wise hasn't returned phone calls seeking comment. Authorities say his whereabouts are unknown, but sources close to the investigation have told WRAL News the Canadian native has returned to that country.