Former CNBC financial analyst-investor arrested in Washington on fraud charges

A former financial analyst and investor who has been on the FBI's most wanted fugitive list since 2021 has been captured.

The man was located and arrested at Port Orchard, Washington June 15. James Arthur McDonald, 52, was the chief investment officer and CEO of two California-based companies, Hercules Investments LLC and Index Strategy Advisors Inc.

MyNorthwest.com reported according to CNBC, McDonald appeared on several financial shows as a “paid contributor” on the network in 2020-2021.

According to Fox Business and other sources, McDonald began having serious financial problems in 2020, when it lost millions of dollars of Hercules investment. He had taken a risky “short” position, which used investments to bet against the health of the US economy and the post-Covid recovery.

According to the U.S. Attorney's Office:

“McDonald anticipated that the Covid-19 pandemic and the election would lead to massive sell-offs that would cause the stock market to plummet,” the U.S. Attorney’s Office said. “When the market decline did not occur, Hercules customers lost between $30 million and $40 million. As of December 2020, Hercules customers were complaining to company employees about losses on their accounts.”

Then in early 2021, he solicited several million dollars from investors for what was supposed to be a capital investment for Hercules. However, he misrepresented what the funds were intended for.

“In total, the Securities and Exchange Commission said McDonald “raised more than $5.1 million from 23 investors and customers, and misappropriated more than $2.9 million of those funds for personal expenses and Ponzi-style payments to previous investors.

Authorities did not say how he was located, but he was found at the home of a Port Orchard, Washington, resident and was arrested on June 15. Before his disappearance, he had deactivated his phone and other digital communications equipment and had indicated to others that he might “disappear.” He avoided capture for almost four years. If convicted on all counts, he faces a 20-year sentence.