A Carlsbad, California stockbroker plead guilty on June 2 to defrauding investors out of more than $6 million through an assortment of risky investments. The San Diego County stockbroker faces up to 20 years in prison for investment fraud.

The stockbroker, Sunil Sharma, used $2.5 million of investor funds for a down payment on a home, a Mediterranean cruise and luxury car leases. According to prosecutors, when Sharma did buy securities with investors’ money, he lost it through risky day trades while telling investors that their investments were doing well. He also allegedly sent fake account statements to investors, regarding the performance of their investment, to mislead them.

Sharma held seminars for investors and told them that his Gold Coast Holdings firm could generate safe retirement income through a diversified portfolio and bonds from emerging markets. He also created what he called “Safe Harbor Tax Lien Acquisitions”. Sharma lied to his investors by claiming that their funds were being managed by Goldman Sachs, however, in a classic Ponzi-scheme fashion, the money from the new investors was being used to pay “profits” to earlier investors. By December 2014, he had run out of investor money to keep paying the false investment returns.

Sharma is scheduled to be sentenced in August.

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