The founder of
Blue Star Automotive Fund has been sentenced to two years in prison after he took part in an investment fraud scheme that caused investors to lose more than $2.5 million, according to a press release from the U.S. Department of Justice.
David Braeger, a Fox Point resident, incorporated Blue Star in 2017. He sold limited partnership shares to 27 investors who paid him more than $5.4 million. Braeger told investors the funding would be used to build an automobile dealership, according to the release.
Braeger did use half of the $5.4 million to fund a dealership but used the remaining money for personal expenses. He spent more than $2.5 million on buying several luxury vehicles (a 1997 Porsche Boxster and a 1972 Porsche 914) and paying personal legal fees.
Braeger also used the money to purchase the
Silver Spring House Restaurant in Glendale, sponsor a NASCAR driver, and buy cryptocurrency, according to the release.
In addition to the Blue Star scheme, Braeger also stole $100,000 from an investor as part of a venture he called IEF, which Braeger claimed would be used to fund litigation related to a Ugandan energy company. Instead, Braeger misappropriated most of that money for his own personal use.
“Mr. Braeger, who held no other job and earned no other income during the relevant period, used his background and connections to steal millions of dollars from over two dozen victims,” said
Gregory Haanstad, U.S. attorney for the Eastern District of Wisconsin. “Braeger also added insult to the extensive financial injuries he caused, seeking to intimidate or bully some victims even after his scheme began unraveling."
Financial Industry Regulatory Authority (FINRA) barred Braeger from associating with any member in any capacity
In 2020, Braeger was barred by the Financial Industry Regulatory Authority (FINRA) from serving as a broker or otherwise associating with a broker-dealer firm.
Braeger was also ordered to pay restitution to his victims in the amount of $2,535,103.19.
