Hercules

James Arthur McDonald Jr., an investor and financial analyst who frequently appeared on CNBC, was sentenced to five years in prison for defrauding investors in a multimillion-dollar scheme, the United States Attorney’s Office said on Monday.

McDonald, 53, a former San Gabriel Valley resident, was the CEO and chief investment officer of two Los Angeles-based companies: Hercules Investments LLC and Index Strategy Advisors Inc.

In late 2020, McDonald adopted a “risky short position” betting against the U.S. economy following the presidential election, with the idea that the combination of the COVID-19 pandemic and the election would trigger a major sell-off in the stock market, according to the Justice Department. However, when the expected market drop did not happen, Hercules’ clients lost between $30 million and $40 million.

McDonald “solicited millions of dollars’ worth of funds from investors” for the purposes of raising capital for Hercules at the start of 2021 after clients complained to the firm’s employees about their losses. However, in doing so, McDonald “misrepresented how the funds would be used” and failed to disclose the firm’s massive losses.

According to the Justice Department, McDonald obtained $675,000 from “one victim group” and then misappropriated most of the money including spending $174,610 at a Porsche dealership and transferring an additional $109,512 to the landlord of a home he was renting in Arcadia.

McDonald also defrauded clients at Index Strategy Advisors, his other firm, said the Justice Department, using less than half of $3.6 million he raised for trading purposes on personal and other expenditures.

McDonald commingled clients’ funds with his personal bank account and used the money to buy luxury cars, pay his rent, make credit card payments, pay off Hercules operating expenses and “to make Ponzi-like payments” to Index Strategy clients — including paying some of those clients using funds from other clients.

Prosecutors claimed that McDonald caused his victims more than $3 million in losses.

“To his victims, [McDonald] seemed to embody the American Dream,” prosecutors argued in a sentencing memorandum. “But looks can be deceiving, and as [McDonald’s] victims learned, their trust had been betrayed.”

In November 2021, McDonald failed to appear before the Securities and Exchange Commission to testify about the allegations he had defrauded investors, and remained a fugitive until last June when he was found at a residence in Port Orchard, Wash.

At the time of his arrest, law enforcement found a fake Washington, D.C., driver’s license with his photograph and the name “Brian Thomas.”

In April 2024, a U.S. District judge found McDonald and Hercules liable for violating federal securities law and ordered them to pay millions in disgorgement and civil penalties.

McDonald pleaded guilty to one count of securities fraud in February.

He will be ordered to pay restitution in this case before a United States district judge at a later date.

Brazil’s Fluminense earn hard-fought 2-1 victory over Saudi Arabia’s Al Hilal to book place in semifinals.

Substitute Hercules scored his second goal in as many second-half appearances to send Fluminense into the FIFA Club World Cup semifinals with a 2-1 quarterfinal win over Al Hilal in Orlando, Florida.

The tournament underdogs struck first on Friday through Matheus Martinelli in the first half before Al Hilal hit back after the break when Marcus Leonardo found the net.

But Fluminense refused to be denied and regained their lead in the 70th minute through Hercules to secure a memorable win over Al Hilal in the first meeting between the two clubs.

The Brazilian side, who entered the tournament as one of the biggest long shots, will now face the winners of Friday’s other quarterfinal clash between fellow Brazilians Palmeiras and English Premier League side Chelsea.

Al Hilal exit despite a fourth tournament goal for striker Leonardo.

The Saudi side was the last from Asia remaining, having pulled off the tournament’s biggest upset with a 4-3, extra-time victory over Manchester City in the second round on Monday.

Martinelli put Fluminense in front in the 40th minute with a brilliant strike. His first touch took Gabriel Fuentes’s pass beyond a charging Al Hilal defender, and his second unleashed a ferocious left-footed shot that beat goalkeeper Yassine Bounou to the top right corner from about 15 yards (14 metres).

A minute into first-half stoppage time, Fluminense keeper Fabio sprawled to his left to push Kalidou Koulibaly’s powerful header beyond the post.

After nearly levelling before halftime, Koulibaly won another dangerous header six minutes into the second from a corner.

This time it landed at the feet of Leonardo, who balanced himself and scooped a finish from close range past Fabio and two defenders on the line.

It remained level four minutes later when Bounou sprawled to his right to take the ball off the feet of German Cano, who was trying to dribble round him after intercepting a pass deep in the attacking half.

Hercules put Fluminense in front for good in the 70th when he was rewarded for his own persistence.

After his first long-range shot was deflected high into the air, he continued his run forward as teammate Samuel Xavier won the next header.

It landed at the feet of Hercules, whose wonderful first touch put him in shooting position before his second sent a right-footed shot into the bottom left corner, prompting jubilation from yet another largely pro-Brazilian crowd at this tournament.

Al Hilal pressured Fluminense in the dying stages, but could not create a clear chance on Fabio’s goal.

Fluminense head coach Renato Portaluppi praised his players after the match.

“We knew it was going to be a difficult game, but I am so pleased with the way my players reacted,” Portaluppi told DAZN. “I am so happy that we have gone through to the semifinals.”

Asked about what he said to Hercules when he came off the bench for the second half, he replied: “I told him just to keep doing what he has to do. He would have the opportunity to score, and when it came, he took it.”

Meanwhile, it was a tough day for Al Hilal’s Portuguese players competing just a day after the Liverpool FC and Portugal national team star Diogo Jota and his brother Andre Silva died in a car accident in Spain.

They were honoured with a pregame moment of silence, and cameras showed Al Hilal starters and Portuguese compatriots Ruben Neves and Joao Cancelo in tears during the tribute.