Grandma's $50M trust fund a fake, feds say in latest allegation against scammer awaiting sentencing
An admitted scammer who lived in a $5.4 million penthouse in the West Loop has returned to the fraud game — even though he was already awaiting sentencing for stealing $23 million from investors in Chicago and elsewhere, federal prosecutors say.
Sean Grusd, whose victims have compared him to notorious fraudster Bernie Madoff, pleaded guilty to fraud in May 2023 and faced 78 to 97 months in prison based on federal sentencing guidelines.
His sentencing was set for Thursday in federal court in Chicago but prosecutors have slammed the brakes on that. They say the government has uncovered a bizarre new fraud scheme in which Grusd duped his investors into thinking he'd repay them with a loan he'd taken out on a massive trust fund he claimed his grandmother set up for him.
As a result, U.S. District Judge Sara Ellis canceled Thursday’s sentencing and rescheduled it for Oct. 2.
Prosecutors are now asking Ellis to lock up Grusd until he’s sentenced. Grusd, who’s been living in Los Angeles free in lieu of bail, has been ordered to travel to Chicago for a detention hearing Thursday.
In the original fraud case, one of Grusd’s victims was Chicago private equity investor John Stafford III, who says companies he controlled were bilked out of $15 million by Grusd, according to court records. Chicago real estate executive Patrick Buck said he and his family members each invested $300,000 in a bogus scheme Grusd set up, the records show.
He falsely told investors their money would be used to buy shares of privately held technology companies but he spent the money on luxury cars and high-priced condos.
Last week, prosecutors filed an emergency request to have Grusd locked up, saying he fabricated bank records to mislead his victims and the government about his ability to repay the money he stole.
On June 26, Grusd and his victims signed a settlement agreement in which Grusd promised to repay them almost $20 million with a loan he’d secure against a forthcoming fortune his grandmother left him in a family trust. Grusd was supposed to wire the money to a bank account for the victims, but that never happened because the account number was bogus, prosecutors say.
According to prosecutors, Grusd told his probation officer he needed to get a loan because he couldn’t touch his grandmother’s trust until he reaches age 35 in 2026. Through his former lawyer, he gave the government a forged bank statement saying the trust contained $50 million in a Wells Fargo Bank account, but bank officials later told the government the statement was fake, prosecutors said.
“Defendant appears to have intentionally misled his own lawyers so that they would communicate those lies to the victims and the government,” prosecutors said in their latest court filing.
Based on the new allegations against Grusd, the federal guidelines for his upcoming sentence will soar to 97-121 months in prison, according to prosecutors.
“There can be no dispute about [Grusd’s] continued criminal conduct. There will be no excuse for it. And he cannot satisfy the standard of producing clear and convincing evidence that he is not likely to continue to commit crimes if he remains on release,” prosecutors said.
They also said they fear Grusd might try to run away to avoid serving prison time. He previously lived in Canada.
Grusd, who’s gone through five sets of lawyers since he was arrested last year, is now represented by Chicago attorney Steve Greenberg, who declined to comment.