The brother of a man who was recently sentenced to federal prison in connection with a prescription drug fraud operation in Florida has himself been indicted on federal investment fraud charges involving more than $2.7 million.
The 45-year-old man is currently facing securities and wire fraud charges in connection with allegations that he misled investors over a three-year period. He is accused of using the money they invested in a hedge fund he controlled for his personal gain.
According to the Securities and Exchange Commission, this man hid his past criminal record from investors, which included a previous conviction in Florida in connection with burglary, theft and a scheme to defraud. He is also accused of falsifying his educational and financial credentials, holding himself out as an investment manager, and making false statements to investors in order to attract unsuspecting victims to what they believed were legitimate business ventures.
He is charged with falsely promising extremely high returns from the hedge fund. These false claims of investment success allegedly led investors to put their life savings into his investment schemes. Little did they know, the SEC claims, they were paying for his lavish lifestyle. Instead of investing his clients' money, he used the money to pay for his personal federal income taxes, illegal narcotics, gambling, cigars and travel for himself and his family, regulators say.
Source: Nyack-Piermont Patch, "Feds: Congers Man Indicted for $2.7M Investment Fraud Schemes," William Demarest, Nov. 19, 2012