Fox Point Man Sentenced to 24 Months’ Imprisonment for Investment Fraud Scheme

Press Release

Gregory J. Haanstad, United States Attorney for the Eastern District of Wisconsin, announced that on December 16, 2024, David Braeger (age 57), of Fox Point, Wisconsin, was sentenced to 24 months' incarceration for committing an investment fraud scheme that resulted in a loss of over $2,500,000 to investors.

According to court records, David Braeger was previously barred by the Financial Industry Regulatory Authority (FINRA) from serving as a broker or otherwise associating with a broker-dealer firm. In 2017, Braeger incorporated an entity known as Blue Star Automotive Fund ("Blue Star"), in which he sold limited partnership shares to twenty-seven investors who gave him over $5.4 million for those shares. Braeger represented to those investors that those funds would primarily be used to fund an automobile dealership. Although Braeger provided approximately half of the money to the dealership, he misappropriated more than $2.5 million of investor funds in ways contrary to his representations. He spent his victims' money on his own living expenses, including, but not limited to the purchase of several luxury vehicles and personal legal fees. Braeger also used his victims' money to purchase the Silver Spring House Restaurant in Glendale, sponsor a NASCAR driver, and buy cryptocurrency. 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.

At the sentencing hearing, U.S. District Judge Lynn Adelman focused on the pain and suffering Braeger caused to his victims and noted that Braeger's crime called for a significant period of incarceration because Braeger was motivated by "greed and self-aggrandizement." In addition to the 24-month period of incarceration, Braeger was ordered to pay restitution to his victims in the amount of $2,535,103.19.

"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 U.S. Attorney Haanstad. "Braeger also added insult to the extensive financial injuries he caused, seeking to intimidate or bully some victims even after his scheme began unraveling. I commend all involved in seeking to hold Mr. Braeger accountable for his actions and for pursuing justice for his victims."

"Mr. Braeger was brought to justice for engaging in a fraudulent scheme that duped investors and caused them losses of over $2.5 million, while he selfishly used the fraudulently obtained money to fund his own personal living expenses," said Special Agent in Charge Vincent R. Zehme, of the Federal Deposit Insurance Corporation Office of Inspector General Chicago Region. "The FDIC OIG will continue to work closely with our law enforcement partners to investigate and hold accountable those who orchestrate such schemes that harm consumers and undermine the integrity of our Nation's financial system."

The case was referred to the U.S. Attorney's Office by the Wisconsin Department of Financial Institutions. It was investigated by the Federal Deposit Insurance Corporation Office of the Inspector General and prosecuted by Assistant United States Attorney Julie F. Stewart.

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Updated December 17, 2024