NEWARK, N.J. – The owners and operators of a purported hedge fund were indicted by a federal grand jury yesterday for allegedly defrauding approximately 20 investors by making extraordinary guarantees about investment returns and then using the money for extravagant purchases or to pay off other victims, Acting U.S. Attorney William E. Fitzpatrick announced.

Alcibiades Cifuentes, 34, and his wife, Jennifer Wee Cifuentes, 36, both of West New York, New Jersey, are charged with four counts of wire fraud, one count of conspiring to commit wire fraud, and one count of stealing funds intended for investment in commodities. The arraignment is pending.

According to the indictment:

Alicbiades and Jennifer Wee Cifuentes allegedly engaged in an investment fraud scheme from 2012 through March 2015. They fraudulently induced victims to invest in the foreign currency and commodity markets through Cifuentes Fund Management (CFM), their hedge fund that purportedly invested in foreign currencies, and then almost immediately spent those investment funds on personal items, such as an Audi R8 and jewelry. The couple would then pay back a portion of the victims’ money with money received from newly duped victims. They allegedly defrauded approximately 20 victims of approximately $500,000.

Each count of wire fraud and wire fraud conspiracy carries a maximum potential penalty of 20 years in prison and $250,000 fine, or twice the gross gain or loss from the offense. The count of commodities theft carries a maximum potential penalty of 10 years in prison and a $1 million fine, or twice the gross gain or loss from the offense.

Acting U.S. Attorney Fitzpatrick credited inspectors of the U.S. Postal Inspection Services under the direction of Inspector in Charge James V. Buthorn, and criminal investigators with the U.S. Attorney’s Office, for the investigation. He also thanked the N.J. Bureau of Securities in the State Attorney General’s Division of Consumer Affairs, under the direction of Attorney General Christopher Porrino and Bureau Chief Christopher W. Gerold, as well as the U.S. Commodity Futures Trading Commission’s Division of Enforcement, under the direction of Director James M. McDonald, for their respective roles in the investigation.

The government is represented by Assistant U.S. Attorney David W. Feder of the U.S. Attorney’s Office’s Economic Crimes Unit.