The Securities and Exchange Commission has charged a New York money manager with operating an alleged Ponzi scheme for the last 30 years. The scheme, which involved some $40 million from 800 clients, allegedly financed the manager’s pornography business, as well as paid for real estate purchases and living expenses. According to prosecutors, the money manager told clients he was investing their money in stock options. However, in reality, he was funding a pornography enterprise and buying property in upstate New York. Although he at one time claimed to be producing annual returns of as high as 21 percent, those returns were fictitious. The manager was charged in a New York federal court with a single count of securities fraud. The SEC also brought civil fraud charges against the manager.
A California advisor was arrested for “looting” the life savings of dozens of investors to bankroll a lavish lifestyle. If convicted, the advisor faces up to 52 years in prison. According to authorities, the individual solicited millions of dollars from California investors with promises of high returns. A licensed insurance agent, the advisor allegedly convinced investors, many of whom were senior citizens, to shift their savings from IRAs, annuities, life insurance accounts, 401(k)s, and certificates of deposit to “high return” investments with his companies. However, he made few, if any, of these investments and rarely paid the double to triple digit returns he promised. Instead, the money went to finance his lavish lifestyle, including $1.1 million on his American Express card, $300,000 for automobiles, $75,000 for Polo Ralph Lauren purchases, and money to buy three homes.