A federal grand jury in Chicago indicted Paaris Kopsaftis, operator of Illinois-based Blackwater Assets Inc., on four counts of wire fraud after prosecutors alleged he ran a Ponzi scheme from June 2020 to May 2025. The indictment alleges Kopsaftis misappropriated client funds, fabricated investment statements showing inflated values, and used money from new investors to repay earlier victims while diverting assets to personal expenses. The case represents the latest U.S. criminal action targeting investment advisers accused of operating Ponzi-style schemes through false performance promises and concealed fund misuse.
Prosecutors Allege Kopsaftis Diverted Client Funds and Repaid Early Investors
According to the indictment, Kopsaftis operated Blackwater Assets Inc. in Illinois and solicited investments from multiple victims beginning in June 2020. Prosecutors allege he represented that client funds would be invested on behalf of investors while knowing that a portion of the money would instead be used for his own benefit.
The charging document alleges investor money was diverted to cover personal expenses, including paying bills, while additional funds were used to repay earlier investors instead of being invested as promised. Prosecutors allege Kopsaftis also claimed client assets would be protected inside custodial accounts and that withdrawals would undergo an internal approval process. The indictment alleges neither representation was true and that no such safeguards existed.
Indictment Details Fabricated Statements and Specific Wire Transfers
Investigators allege Kopsaftis created and distributed fabricated account statements showing inflated investment values in order to convince victims their portfolios continued to grow and to discourage redemption requests. Prosecutors also allege the documents encouraged some investors to contribute additional funds.
The four wire fraud counts stem from specific transactions identified by the grand jury, including a $100,000 wire transfer from one victim in April 2022, a $54,542.99 wire transfer in February 2024, and two April 2025 emails transmitting allegedly false account statements to investors.
Kopsaftis Pleads Not Guilty, Faces Maximum 20 Years Per Count
Kopsaftis pleaded not guilty during his initial appearance in federal court in Chicago. A status hearing has been scheduled for July 15 before U.S. District Judge Jorge L. Alonso.
Each wire fraud count carries a statutory maximum sentence of 20 years in federal prison if convicted, although any sentence would ultimately be determined by the court after considering the U.S. Sentencing Guidelines and other statutory factors. The Federal Bureau of Investigation led the investigation with assistance from the Securities Department of the Illinois Secretary of State's Office.
FAQ
What charges does Paaris Kopsaftis face in the Chicago indictment?
Kopsaftis was indicted by a federal grand jury in Chicago on four counts of wire fraud. Prosecutors allege he operated a Ponzi scheme through Blackwater Assets Inc. from June 2020 to May 2025, misappropriating client funds and using new investor money to repay earlier victims.
What is the maximum prison sentence Kopsaftis could receive if convicted?
Each wire fraud count carries a statutory maximum sentence of 20 years in federal prison. Any sentence would be determined by the court after considering the U.S. Sentencing Guidelines and other statutory factors. Kopsaftis pleaded not guilty during his initial appearance, and a status hearing is scheduled for July 15 before U.S. District Judge Jorge L. Alonso.
