Federal prosecutors have announced that a 39-year-old man has admitted to running a Ponzi scheme that bilked investors in 12 states out of more than $70 million. The man entered guilty pleas to felony counts of mail fraud, conspiracy to commit mail fraud and conspiracy to commit money laundering on Oct. 9 in the U.S. District Court for the Western District of New York. He is scheduled to return to court in March 2020 to be sentenced.
U.S. attorneys say the man collected $155.5 million from about 1,000 investors between 2012 and 2018. The money paid in by new investors was used to provide returns to individuals who had invested earlier. The man is said to have used hundreds of bank accounts to conceal his activities. Prosecutors claim that he also purchased respected investment advisory firms in states including Florida, Pennsylvania, Texas and Ohio to make his scheme appear legitimate. He has been charged in Pennsylvania and New York as well and could be sentenced to 20 years in prison in both states. He also faces a fine of up to $500,000 in New York.
According to media reports, the man used the money he collected from investors to fund a lavish lifestyle. Prosecutors say he spent $150,000 to throw a birthday party for himself in Las Vegas and purchased suits worth $1.2 million.
Cases like this one are often settled with plea agreements because the most important pieces of evidence are often bank records and other documents that juries tend to find extremely convincing. When representing clients who are facing mail fraud charges, experienced criminal defense attorneys may remind prosecutors that juries often find complex cases difficult to follow. Attorneys could also point out that resolving these matters quickly at the negotiating table saves the government money and eliminates the risk of a jury trial.