CNBC financial analyst finally arrested after three years on the run as he's charged with defrauding investors for millions in the aftermath of the 2020 election

A former CNBC financial analyst-turned fugitive has been arrested by the FBI after three years on the run, as he is accused of defrauding millions from his investors.

James Arthur McDonald Jr, 52, was arrested in Port Orchard, Washington, on Saturday by the FBI and will be extradited to California to stand trial in the next few weeks for his alleged crimes, the United States Department of Justice said. 

He was the CEO and chief investment officer of two California-based companies: Hercules Investments LLC and Index Strategy Advisors Inc, and would also frequently appear as a financial analyst on CNBC.

McDonald became a fugitive in November 2021 when he failed to appear before the US Securities and Exchange Commission to testify after being accused of defrauding his investors.

Ahead of his 2021 trial, McDonald had reportedly terminated his previous phone and email accounts and had told someone he planned to 'vanish'.   

James Arthur McDonald, Jr. was wanted for securities fraud after allegedly stealing client funds and concealing his investment firm's massive financial loss.

McDonald, Jr., was the CEO and chief investment officer of two companies: Hercules Investments LLC, based in downtown Los Angeles, California, and Index Strategy Advisors Inc.

According to the DOJ, the year prior, he had lost tens of millions of dollars of client Hercules money after 'adopting a risky short position that effectively bet against the health of the United Sates economy in the aftermath of the US presidential election'. 

The financial analyst and CEO had predicted that the COVID-19 pandemic and the election would result in major selloffs that would cause the stock market to drop. But when the market decline didn't occur, Hercules clients lost between $30 million and $40 million.

Then, in January 2021, McDonald solicited millions of dollars worth of funds from investors to raise capital for Hercules, and allegedly 'misrepresented how the funds would be used'. 

He is also suspected of obtaining $675,000 in investment funds he raised, which he used to splurge on himself — 'spending roughly $174,610 of them at a Porsche dealership.' 

The alleged fraudster transferred over $100K of those funds to the landlord of a home he was renting in Arcadia, California, and then another $6,800 to an online store to buy designer clothing.

He also reportedly sent clients falsified account statements.

McDonald is being charged with one count of securities fraud, one count of wire fraud, three counts of investment adviser fraud, and two counts of engaging in monetary transactions in property derived from unlawful activity. 

He appeared in court on Monday in Tacoma, Washington and will continue his court proceedings in Los Angeles in the coming weeks. If found guilty on all counts, the con artist could face up to 35 years in prison.

The CEO-turned fraudster would frequently appear on CNBC financial television news network  as a financial analyst

Pictured: McDonald makes an appearance on CNBC as a financial analyst before going on the run in 2021 following fraud allegations