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Elk Grove man accused of stealing investors' millions
By Christy Gutowski | Daily Herald Staff

Kevin Carney


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Published: 10/14/2009 2:24 PM | Updated: 10/14/2009 6:55 PM

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An Elk Grove Village man is accused of stealing millions from at least 30 financially devastated investors, some of whom trusted him with their life savings.

Kevin G. Carney was arrested Wednesday, a day after a DuPage County grand jury indicted him on charges alleging theft by deception, theft by unauthorized control, securities. wire and mail fraud and that he sold securities without registering.

Carney, 48, was held overnight in the DuPage County jail on a $2 million cash bond.

He is accused of pilfering more than $3 million from 31 named investors from January 2007 to Oct. 9, 2008, according to the indictment. But in federal bankruptcy and secretary of state administrative complaints, as much as $10 million has been stolen from 350 people from the suburbs and out of state.

After Carney's personal assets were seized, authorities say they returned about 5 cents on the dollar to the victims. The duped investors also are trying to recoup some of their losses through a separate federal bankruptcy proceeding.

In a classic Ponzi scheme, similar but smaller than that operated by imprisoned swindler Bernie Madoff, Carney is accused of using significant amounts of investors' money to pay interest to other clients, falsely portraying these payments as proceeds from investments.

"I'm the biggest loser," a 57-year-old DuPage County woman told the Daily Herald.

She and her husband lost as much as $784,000, according to the indictment. The woman, who asked not to be publicly identified, said she lost her life savings after trusting the smooth-talking Carney.

She said Carney told her he had developed a day trading software program that allowed him to pre-empt stock market investors, giving him a three-minute edge to buy and sell. He promised a 20 percent monthly profit, she said.

At first, in 2007, the DuPage County woman said she invested about $30,000. Afterward, she cashed in her retirement savings. Carney did give her nearly $250,000 back in what he called a two-month profit, she said. Then, in October 2008, secretary-of-state officials closed down his Elk Grove Village office. She said the once-attentive investor no longer returned her calls, so she confronted him at this home in a panic.

"Kevin said the money is all still there and that it was just a misunderstanding with the state," she said. "It's completely life altering. Right now I owe the federal government $148,000 because I cashed in my IRA. I owe penalties and interest."

She added: "I was very secure and now it appears to be all gone. All I know is I don't have my money."

Carney's lawyer, Michael C. Rosenblat, said he will ask a judge Monday to reconsider the high bond and release Carney with restrictions such as home confinement and electronic monitoring.

"The state has been investigating Kevin for over a year and, during that time, we have been cooperating," Rosenblat said. "Now that the state has decided to charge Kevin, we look forward to addressing the allegations in the indictment."

Carney has a clean criminal history, his attorney said. The defendant has been married 17 years and has a 13-year-old daughter. Carney grew up in Granite City and is a lifelong Illinois resident. He is scheduled to appear Monday before Circuit Judge George Bakalis.