U.S. Attorney Gregory J. Haanstad | U.S. Department of Justice
David Braeger, a 57-year-old resident of Fox Point, Wisconsin, has been sentenced to 24 months in prison for an investment fraud scheme that defrauded investors of over $2.5 million. The sentencing took place on December 16, 2024, as announced by Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin.
Court records revealed that Braeger was previously barred by the Financial Industry Regulatory Authority (FINRA) from associating with broker-dealer firms. Despite this restriction, in 2017, he established Blue Star Automotive Fund and sold limited partnership shares to twenty-seven investors who invested more than $5.4 million. Braeger misled these investors into believing their funds would support an automobile dealership; however, he misappropriated over $2.5 million for personal use including luxury vehicles and legal fees. Additional misuse included purchasing the Silver Spring House Restaurant in Glendale, sponsoring a NASCAR driver, and buying cryptocurrency.
Furthermore, Braeger stole $100,000 from another investor under the pretense of funding litigation related to a Ugandan energy company through a venture called IEF but used most of it for personal expenses.
During the sentencing hearing led by U.S. District Judge Lynn Adelman, emphasis was placed on the impact on victims and Braeger's motivations driven by "greed and self-aggrandizement." In addition to imprisonment, Braeger must pay restitution amounting to $2,535,103.19.
U.S. Attorney Haanstad remarked on Braeger's exploitation of his background and connections to defraud numerous victims while also attempting intimidation tactics when his scheme began collapsing: "I commend all involved in seeking to hold Mr. Braeger accountable for his actions and for pursuing justice for his victims."
Special Agent Vincent R. Zehme from the Federal Deposit Insurance Corporation Office of Inspector General Chicago Region stated: “Mr. Braeger was brought to justice for engaging in a fraudulent scheme that duped investors...while he selfishly used the fraudulently obtained money to fund his own personal living expenses.”
The case originated from a referral by the Wisconsin Department of Financial Institutions and was investigated by FDIC's Office of Inspector General with prosecution led by Assistant United States Attorney Julie F. Stewart.
