The former broker and investment fund manager who pleaded guilty in September to orchestrating a $100 million Ponzi-like securities fraud scheme has been sentenced to over nine years in prison, according to Philip R. Sellinger, U.S. attorney for the District of New Jersey.
Brenda Smith, 61, of Philadelphia, had pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to count seven of an indictment charging her with securities fraud.
In the U.S. District Court in Newark on Wednesday, Arleo sentenced Smith to 109 months in prison, Sellinger said in a news release.
In addition, the judge sentenced her to three years of supervised release and ordered her to pay $47.2 million in restitution, Sellinger said.
Kevin F. Carlucci, a lawyer from the Office of the Federal Public Defender who represented Smith, according to court documents, did not immediately respond to a request for comment on Thursday.
Pooled Fund Sank Investors' Money
On June 2, 2020, the Department of Justice indicted Smith in U.S. District Court for the District of New Jersey.
According to documents filed in the case by the Justice Department and statements made in court, Smith managed and controlled Broad Reach Capital, a pooled investment fund/hedge fund that was established in February 2016 and was open to accredited investors with a minimum investment of $1 million.
From February 2016 through August 2019, Smith led a scheme in which she made misrepresentations to investors and promised she would invest their funds in particular trading strategies that Broad Reach Capital was allegedly optimally situated to execute.
Smith misrepresented the performance and success of Broad Reach Capital to investors and prospective investors and touted the company as a trade-focused investment fund that was highly liquid and utilized a robust risk management program, according to court documents.