Another Ponzi Halted In New York; SEC Says Matthew J. Ryan Targeted Senior Citizens In Scheme Involving Company That Existed In Name Only

American Integrity Financial Co. existed in name only, the SEC said today. Its operator, Matthew J. Ryan, 45, of Troy, N.Y., used the bogus company to fleece senior citizens in a Ponzi scheme by telling them they’d earn “guaranteed” return rates of  3.85 percent to 9 percent each year.

It was the second Ponzi scheme to rock the Albany area — and the third major case of financial fraud in New York state — in the past two weeks.

“Ryan obtained these investments by fostering the false impression that American Integrity is a legitimate, substantial financial services firm, with numerous employees and for which he was merely an employee,” the SEC charged.

‘Phony Manhattan Address’

“To perpetrate this fraud, Ryan used devices such as a phony Manhattan address, and fictitious names and titles of purported American Integrity employees, and he misrepresented to investors that their investments were safe and insured by the Federal Deposit Insurance Corporation (FDIC) or the Securities Investor Protection Corporation (SIPC) and that American Integrity was qualified to offer IRAs and other tax-deferred investments,” the SEC charged.

American Integrity was a “classic Ponzi scheme,” the SEC said.

‘Merely The Name On A Bank Account’

The firm “is not even an entity, let alone an operating financial company and investments in it are not in any way insured,” the SEC said. “It is merely the name on a bank account that Ryan opened and controls. Ryan simply took investors’ money and deposited the money into the bank account. When he needed money to pay investors the returns he had promised or principal amounts they sought to withdraw, Ryan simply withdrew funds from the same bank account.

Investor funds were used to pay Ryan’s lenders “and to pay for his own personal expenses, including luxury cars,” the SEC said. “As of March 31, 2010, it appears that American Integrity owed investors at least $3.5 million, while it had less than $8500 in cash on hand.”

Recent New York Frauds

Just days ago, the SEC charged McGinn, Smith & Co. of Albany in a fraud case investors said was a Ponzi scheme. Separately, the SEC charged Gryphon Holdings Inc. in a bizarre stock-tips scheme. Five people were arrested by federal agents in the Gryphon Holdings case.

Gryphon “touted offices on Wall Street and around the world while, in reality, defrauding investors from a strip mall on Staten Island,” David Rosenfeld, associate director of the SEC’s New York Regional Office, said on the day the complaint was filed.

The SEC said Gryphon was a “sham designed to separate clients from their money.”

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3 Responses to “Another Ponzi Halted In New York; SEC Says Matthew J. Ryan Targeted Senior Citizens In Scheme Involving Company That Existed In Name Only”

  1. Hope nobody finds this a non-related question, is Diamond Rewards a legit business or a scam? Anyone know anything about it?

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  2. Sounds a lot like another diamond based MLM from a few years back – Canadian Diamond Traders:
    http://www.commerce.wa.gov.au/ConsumerProtection/scamnet/Scams/Canadian_Diamond_Tra1.html
    That was an obvious pyramid scheme, I bet Diamond Rewards is the same.

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  3. Tony, you are absolutely correct. This is an illegal pyramid scheme. The only way you make any money is by recruiting others to join the program. This is a matrix program, and you will soon run out of people to join and it will all come crashing down. The CEO, David Wright, has done this business before with a failed MLM Program called Diamond Cash Club that was also an illegal pyramid scheme.

    So beebee, stay away, unless you want to lose your money.

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