In possibly the most ballsy attempt to recoup money lost in an (alleged) Ponzi scheme, a group of Californians pretended to be FBI agents, held up a hedge fund, and demanded their money back.

According to a report in the Folsom Telegraph, Craig Anderson and his three buddies dressed up in full police gear, "complete with bullet proof vests, ear pieces, fake credentials, hand cuffs and badges," and then stormed the office of the alleged fraudster.

They announced that they were FBI and SEC agents and gave the alleged Ponzi, Anthony Vassallo, who was in a meeting with a group of hedge funders at the time, an ultimatum:

Anderson told the hedge fund operators that they had until noon on Monday, March 9, 2009, to wire $378,300.16 to a Patelco Credit Union bank account in the name of the “Spirit Foundation."

Unfortunately we're not sure how the hold-up situation resolved itself. We'd really like to know.

The fake FBI agents allege that Vassallo was the ring-leader in a $40 million ponzi scheme. The SEC's verdict is still out. The DOJ announced criminal charges against Vassallo's fund, Equity Investment Management, in March 2009.

He's suspected of running a classic Ponzi scheme:

Vassallo is alleged to have deceived investors about their rates of return, fabricated performance reports, and used investor funds for unauthorized purposes, including to make purported "dividend" payments to other investors.

But now the guys who tried to bust them, the FBI impersonators, are the ones in trouble. All four are on probabtion and a couple of them were even sentenced to home imprisonment by a U.S district court.

On top of which, they didn't get their money back.

However - some good may come from their break in. The SEC apparently froze Vassallo's assets back in 2009.

The SEC obtained emergency orders freezing Vassallo's and EIMT's assets, including $1.2 million in a bank account controlled by Vassallo.

Now that they're aware he's still holding meetings with hedge fund managers like it's business as usual, maybe prosecutors have more to go on.

Read the full story at the Folsom Telegraph >>>