Some 64 Hawaii residents were victimized in a $10 million Ponzi scheme allegedly operated by a Florida man who was arrested by federal authorities this morning in Tampa, federal and state officials said in a news conference this afternoon.

Patrick H. Rakotonanahary, 34, was indicted by a federal grand jury here on 21 counts of wire fraud, U.S. Attorney Florence Nakakuni announced.
Rakotonanahary headed a company called Cyber Market Group, LLC that promised investment returns of between 6 percent and 10 percent per week and took in $10.2 million from 100 victims between December 2007 and May 2009, Nakakuni said.
The 64 Hawaii victims invested a total of $7.99 million, said Nakakuni.
Rakotonanahary visited Hawaii twice to promote his investments and enlisted seven “investment advisers” here who referred clients to Cyber Market, the indictment alleged.
None of the investment advisers was named or charged in the indictment.
Nakakuni and other officials said Rakotonanahary promised high rates of return on trading in foreign currencies.
Of the $10 million taken in, Rakotonanahary returned some $8.4 million to investors, saying the payments were earnings on the original investments, according to the regulators.
In fact, the money paid back to early investors actually came from later investors — a classic sign of the Ponzi scheme fraud, named after a New England con man who swindled victims in 1920.
Rakotonanahary actually lost some $800,000 in foreign currency trading and spent about $1 million on himself, regulators charged.
The case was investigated by the Honolulu office of the FBI, the U.S. Commodities Futures Trading Commission and the securities branch of the state Department of Commerce and Consumer Affairs.
If convicted, Rakotonanahary would face a maximum of 20 years in prison per criminal count and fines of $250,00 per offense.