SAN DIEGO – A former FedEx driver who stole more than half a million dollars from investors in San Diego after telling them he had set up a new hedge fund was sentenced Monday to 33 months in federal prison.
Joshua , 41, was also ordered to pay $556,629 in restitution.
“You didn’t steal from a stranger, you stole as a friend, and in this court’s opinion that’s even worse,” U.S. District Judge Cathy Ann Bencivengo told the defendant. “That’s a theft that goes right to the heart and soul and stays with the victim for a very long time.”
After losing his job as a FedEx driver, Knaup opened up EquityPro Capital, an investment management firm based in downtown San Diego.
Near the end of 2013, Knaup falsely claimed to have established a new hedge fund and began soliciting investors, prosecutors said.
The defendant gave potential investors a prospectus that provided detailed information about his purported hedge fund, which he called “The F2 Fund.”
According to the prospectus, The F2 Fund derived its name from “a passage in the Bible about giving of the `First Fruits’ of your income.”
In order to attract investors, Knaup guaranteed that investors would receive a certain return on their investment and falsely claimed to have invested his own money in the hedge fund, court papers show.
With the thousands of dollars he stole from investors, Knaup rented prime office space in a building near Petco Park. Inside the office, he created a wall using 30 flat-screen televisions that displayed stock trading information, which duped investors would later mention as an apparent sign of the business’ legitimacy, according to prosecutors.
Despite the outward indications of success, The F2 Fund did not exist and Knaup did not invest a single dollar of investors’ funds, and instead used the money for personal and business purchases, prosecutors said.