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Tag: Sean Healy

  • Sean Healy Sentenced To Nearly 16 Years, Ordered To Pay $16.7 Million In Ponzi Case; Meanwhile, Trevor Cook Reportedly Has Plea Deal

    A federal judge has ordered a Florida man to spend nearly 16 years in prison and pay $16.7 million in restitution for fleecing investors in a Ponzi scheme.

    Sean Healy, 39, of Weston, scammed dozens of investors in Pennsylvania. He went on to live in the lap of luxury in Florida, acquiring a $2.4 million waterfront home, a Bentley, several Ferraris, Lamborghinis and Porsches worth more than $2.3 million and jewelry worth $1.5 million.

    Meanwhile, Trevor Cook, charged criminally with mail fraud and tax evasion in a separate, $190 million Ponzi case in Minnesota, has struck a deal with prosecutors, the AP is reporting. Details about the deal are unclear, but the AP, citing comments by Bill Mauzy, Cook’s attorney, reported that Cook will plead guilty in the coming weeks.

    Healy became infamous in Florida, and was described as a smaller version of  former Wall Street titan Bernard Madoff and former Fort Lauderdale attorney Scott Rothstein. He was charged in a 55-count indictment unsealed in Pennsylvania last year with multiple counts of wire fraud, mail fraud, money laundering and obstruction of justice.

    Initially Healy tried to sandbag prosecutors by providing “phony bank statements and phony trading records” to thwart a grand-jury probe, but the government didn’t buy it.

    “When the authentic records were obtained, they revealed that Healy had simply spent the money on his extravagant lifestyle and used some of it to pay back earlier investors who he defrauded between 2003 and 2008,” prosecutors said.

    Healy was sued separately by the SEC and the CFTC, which said he used investor funds to purchase gold bullion and “to lease a luxury suite at Miami’s BankAtlantic Arena.”

    For its part, the SEC said the sky was the limit for Healy.

    “Rather than investing the money as he promised, Sean Healy used investor funds to finance an extravagant lifestyle for himself and his family,” the SEC said.

  • WRAP-UP: Marine Corps Officer Tells Judge Ponzi Schemer Who Fleeced Seniors, Charities ‘Violated Every Character Trait I Hold Dear’

    EDITOR’S NOTE: This column summarizes three Ponzi cases: Joseph Forte, Sean Healy and Tom Petters. Forte has been sentenced; Healy has been convicted, and Petters is waiting to hear his fate from a Minnesota jury. The cases vary widely in size and scope, but demonstrate the terrible consequences of Ponzi schemes on individual investors and charitable institutions

    Joseph Forte scheme.

    A U.S. Marine Corps officer speaking for victims of the Joseph Forte Ponzi scheme in Philadelphia yesterday told a federal judge Forte’s actions caused his family’s charitable foundation to suffer a $15 million loss.

    Lt. Col. William Hooper, a former Marine Corps aviator and member of the U.S. Marine Corps Reserves, said his father suffered a stroke after learning Forte had plundered The Thornton D. and Elizabeth S. Hooper Foundation of Radnor, Pa.

    ponzinewsWilliam Hooper’s father, Bruce Hooper, himself a former Marine, served as president of the Marine Corps University Foundation (MCUF) and is a trustee and member of the Investment Subcommittee, according to the MCUF website. Bruce Hooper is the vice president of the Thornton D. and Elizabeth S. Hooper Foundation and the vice chairman of the Foreign Policy Research Institute of Philadelphia.

    William Hooper, speaking for the Hooper family at Forte’s trial, said Forte’s actions “violated every character trait I hold dear,” according to the Delaware County Times.

    Meanwhile, a woman who lost $109,000 she had inherited from her mother by investing it with Forte called him a “bastard.”

    Forte’s Ponzi scheme unraveled in 2008, after operating for 12 years. George Clark, a U.S. Postal inspector, said in an affidavit that Forte simply made up numbers and collected money until the bitter end.

    “The last statement received by investors for the third quarter of 2008 indicates that the fund had a return of 18.88% for the quarter and that the Joseph Forte LP fund’s total value as of September 30, 2008 was $154,700,189,” Clark said.

    In truth, Clark said, the value of Forte’s trading account was only $150,000. The account was closed in October 2008, but Forte continued to collect money from clients until Dec. 19, Clark said.

    “According to Forte, all reported returns were false in their entirety and were simply numbers that [he] fabricated,” Clark said. “Forte admitted that in every quarter from 1996 through the end of 2008, the reported returns were false.”

    Forte was sentenced to 15 years in prison. He also was ordered to pay $34.8 million in restitution.

    See a story in the Delaware County Times.

    Sean Healy scheme

    Luxury cars and Ponzi schemes go together like money and politics. Federal prosecutors have seized more than 20 cars in the alleged Scott Rothstein Ponzi in Florida, for example. One of them had a price tag of more than $1.5 million.

    Before the Rothstein case came on the Feds’ radar screen last month, there was the case of Sean Healy. It, too, has a Florida tie, although the prosecution occurred in Pennsylvania.

    Healy, 38, of Weston, Fla., was charged in a 55-count indictment unsealed last month with multiple counts of wire fraud, mail fraud, money laundering and obstruction of justice.

    Prosecutors said Healy “spent the money to fund a lavish lifestyle.”

    Purchases included “numerous exotic vehicles and sport cars, including a Bentley and several Ferraris, Lamborghinis and Porsches worth over $2.3 million,” prosecutors said.

    Obstruction of justice was charged because Healy thwarted a grand jury by providing “phony bank statements and phony trading records, indicating that the Pennsylvania investor’s money was used for legitimate trading activity in stocks and commodities,” prosecutors said.

    “When the authentic records were obtained, they revealed that Healy had simply spent the money on his extravagant lifestyle and used some of it to pay back earlier investors who he defrauded between 2003 and 2008,” prosecutors said.

    The grand-jury probe began in March, after an investor who had been scammed in Pennsylvania sued Healy and his wife, Shalese Rania Healy, in U.S. District Court in the Southern District of Florida, alleging that Pennsylvania investors had lost $14.6 million with Healy between April 2008 and February 2009.

    In addition to the automobiles, Healy also bought a $2.4 million waterfront mansion furnished with more than $2 million of home improvements, plus $1.5 million in men’s and women’s jewelry.

    Healy pleaded guilty Monday in Harrisburg to two counts of wire fraud and one count of unlawful monetary transactions. He faces up to 50 years in prison.

    Tom Petters’ scheme

    Minnesota businessman Tom Petters is accused of operating a $3.65 billion Ponzi scheme. The jury began to deliberate late Monday.

    Deliberations continued Tuesday. No verdict was reached, and the jury was dismissed until Monday because of the Thanksgiving holiday in the United States.

    Prosecutors said Petters presided over phantom sales of consumer electronics to big-box retailers, fleecing investors out of millions. His defense counsel acknowledged that fraud had occurred, but blamed it on subordinates.

  • Bank Failure Brings 2009 Total To 99; Foreclosures Pile Up In California, Florida; Prosecutors Battle Mortgage Fraudsters And Ponzi Schemers

    Andy Bowdoin
    Andy Bowdoin

    UPDATED 1:33 P.M. EDT (U.S.A.) The failure yesterday of San Joaquin Bank in Bakersfield, Calif., brought the total of bank failures in the United States this year to 99.

    With weeks remaining in the year, it is a virtual certainty that failures will top the 100 mark. Banks have been failing at an average rate of slightly less than 10 per month in 2009. Last year, 25 banks failed in the United States. In 2007, only three banks failed.

    As many as 416 names of other troubled banks appear on a confidential list maintained by the Federal Deposit Insurance Corp. (FDIC). The hemorrhage of bank failures — in large measure caused by a severe recession, consumer and business defaults, a collapse of real-estate prices in many parts of the country, brazen fraud in the mortgage sector and a contraction of development — is not over.

    Although banks and the government are working together to find ways to curb an explosion in the mortgage-foreclosure rate, foreclosures continue to suck wealth from the economy.

    “Bank repossessions, or REOs, jumped 21 percent from the second quarter to the third quarter, corresponding to jumps in defaults and scheduled auctions in the previous two quarters,” said James J. Saccacio, chief executive officer of RealtyTrac.

    RealtyTrac tracks foreclosure activity in the United States. On Oct. 14, the company said foreclosures in the third quarter set a record and were up 23 percent from the total reported in the third quarter of 2008.

    Foreclosure filings, default notices, scheduled auctions and bank repossessions totaled 937,840 in this year’s third quarter, RealtyTrac reported.

    Although foreclosure filings in September totaled 343,638 — a 4 percent decrease from August’s total — the number still represented a 29 percent increase from September 2008.

    September’s monthly total was among the highest figures reported since January 2005, trailing only July and August of this year.

    “REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan modification efforts and high volumes of distressed properties,” Saccacio said.

    Florida, California Battered By Foreclosures

    Six states — California, Florida, Arizona, Nevada, Illinois and Michigan — accounted for 62 percent of the foreclosure total in the third quarter, RealtyTrac reported. Foreclosures in the six states totaled 579,541.

    Foreclosures in California totaled 250,054 in the third quarter; Florida posted 156,924 foreclosures, a 23 percent increase from the total reported in the third quarter of 2008.

    Because Florida is an attractive state for retirees — and because those retirees have friends and loved ones in all corners of the United States — the state is an attractive target for scammers.

    Florida also has a large population of immigrants, another attractive target of scammers.

    Agencies Battle Florida Ponzi Fraud

    In the past 72 hours alone, the SEC, the CFTC, the FBI, the U.S. Postal Inspection Service, and federal prosecutors have announced three Florida Ponzi scheme prosecutions, a conviction in a separate Ponzi case — and a conviction in a fraud case in which a Florida man created more than 260 identities on eBay and fleeced customers out of $717,000.

    On the Florida Ponzi front:

    • David F. Merrick, Traders International Return Network (TIRN), MS Inc., GTT Services Inc., MDD Consulting Inc. and Go ! Tourism Inc. were named defendants in emergency actions in U.S. District Court for the Middle District of Florida. Merrick, 61, of Apopka, is accused of operating a $22 million Ponzi scheme with ties to Panama, Mexico, Malaysia, Switzerland and the Netherlands.
    • HomePals Investment Club LLC, HomePals LLC (Home Pals), Ronnie Eugene Bass Jr., Abner Alabre and Brian J. Taglieri were charged in South Florida with securities fraud, conspiracy to commit securities fraud, wire fraud and money laundering. The defendants were accused of targeting Haitian-Americans in a $14.3 million Ponzi scheme that promised investment returns of 100 percent every 90 days. The scheme gathered money from as many as 64 “investment clubs,” the SEC said.
    • Sean Healy, 38, of Weston, Fla., was charged in a 55-count indictment unsealed in Pennsylvania with multiple counts of wire fraud, mail fraud, money laundering and obstruction of justice. The Florida-based scheme led to at least $14.6 million in losses in Pennsylvania alone, prosecutors said, adding that Healy purchased “numerous exotic vehicles and sport cars, including a Bentley and several Ferraris, Lamborghinis and Porsches worth over $2.3 million.” Healy also bought a $2.4 million waterfront mansion furnished with more than $2 million of home improvements, plus $1.5 million in men’s and women’s jewelry, prosecutors said.
    • Michael Riolo, 38, of Boca Raton, was sentenced to more than 24 years in prison for bilking investors in a $44 million Ponzi scheme. Prosecutors accused Riolo of cooking the books and sending false statements to investors that reported “consistent trading profits and increasing account balances.” In reality, Riolo “misdirected money he received from some investors to make distributions to other investors who sought to withdraw money from their investment accounts,” prosecutors said.
    • Andy Bowdoin, 74, of Quincy, Fla., continued his efforts to get back into a Ponzi case in which he had already submitted to the forfeiture of tens of millions of dollars seized last year by the U.S. Secret Service in an international wire-fraud and money-laundering probe. Bowdoin, who submitted to the forfeiture in January, fired his attorneys and began to file as his own attorney in February. In April, federal prosecutors announced that Bowdoin had signed a proffer letter in the case prior to acting as his own attorney and acknowledged his company, AdSurfDaily Inc., had been operating illegally. “Mr. Bowdoin also confirmed that the revenue figures of the enterprise were managed to make it appear to prospective members that the enterprise called Ad Surf Daily was a consistently profitable, and brilliant, passive income opportunity,” prosecutors said. Despite his own acknowledgments of illegal conduct, despite the proffer — and despite the fact Bowdoin had asked the court to grant his request to submit to the forfeiture and that the court granted Bowdoin’s request — Bowdoin climbed back on the litigation saddle. “Mr. Bowdoin says that after discussing this case with his supporters, and concluding that they were smarter than his attorneys, he has changed his mind,” prosecutors said.

    Total funds gathered in the alleged Bowdoin, Merrick, Bass, Alabre, Taglieri and Healy Ponzi schemes in Florida are estimated at $156.3 million, during a period in which U.S. banks are failing, the U.S. economy is confronting the worst business conditions since the Great Depression and mortgage foreclosures are piling up across the country, including hard-hit Florida.

    With the Riolo conviction added to the estimate, the number totals $200.3 million. The estimate does not reflect the massive, $65 billion Ponzi fraud of Bernad Madoff, who wiped out clients in Florida and elsewhere. Nor does it take into account allegations that Arthur Nadel, another man implicated in a large-scale fraud in Florida, may be responsible for tens — if not hundreds — of millions of dollars of Ponzi pain.

    “During these tough economic times, it is more important than ever that those who lie to and steal from the investing public be held accountable for their misconduct,” said Jeffrey H. Sloman, Acting U.S. Attorney for the Southern District of Florida, commenting on the 24-year prison sentence Riolo received.

    “The United States Attorney’s Office will continue to investigate and prosecute those who perpetrate these large-scale fraud schemes,” Sloman said.

  • INCREDIBLE: Yet Another Florida Man Indicted In Alleged Ponzi Scheme; Prosecutors Say Sean Healy Of Weston Bought A Bentley And ‘Several Ferraris’

    There has been nonstop news about Florida Ponzi schemes in the past 48 hours. Several indictments have been announced, the latest involving Sean Healy of Weston.

    Healy, 38, was charged in a 55-count indictment unsealed in Pennsylvania with multiple counts of wire fraud, mail fraud, money laundering and obstruction of justice.

    Prosecutors said Healy “spent the money to fund a lavish lifestyle.”

    Purchases included “numerous exotic vehicles and sport cars, including a Bentley and several Ferraris, Lamborghinis and Porsches worth over $2.3 million,” prosecutors said.

    Obstruction of justice was charged because Healy thwarted a grand jury by providing “phony bank statements and phony trading records, indicating that the Pennsylvania investor’s money was used for legitimate trading activity in stocks and commodities,” prosecutors said.

    “When the authentic records were obtained, they revealed that Healy had simply spent the money on his extravagant lifestyle and used some of it to pay back earlier investors who he defrauded between 2003 and 2008,” prosecutors said.

    The grand-jury probe began in March, after an investor who had been scammed in Pennsylvania sued Healy and his wife, Shalese Rania Healy, in U.S. District Court in the Southern District of Florida, alleging that Pennsylvania investors had lost $14.6 million with Healy between April 2008 and February 2009.

    In July, the SEC and CFTC sued Healy in a case that alleged massive fraud. Also named in the complaints was Healy’s company, Sand Dollar Investing Partners LLC. Healy’s wife was named a relief defendant, meaning investigators believed she had received ill-gotten gains from the scheme.

    CFTC said investor funds also were used to purchase gold bullion and “to lease a luxury suite at Miami’s BankAtlantic Arena.”

    The sky was the limit, said an SEC official.

    “Rather than investing the money as he promised, Sean Healy used investor funds to finance an extravagant lifestyle for himself and his family,” said Antonia Chion, associate director of the SEC’s Division of Enforcement.

    The July complaint by the SEC also alleged that Healy provided false information to the U.S. Attorney’s Office for the Middle District of Pennsylvania, which brought the obstruction charges and the other charges. The indictment was unsealed yesterday in Harrisburg, Pa.

    Dennis Pfannenschmidt, U.S. Attorney for the Middle District of Pennsylvania, cataloged the spectacular purchases Healy allegedly made with investors’ funds.

    In addition to the automobles, Healy also bought a $2.4 million waterfront mansion furnished with more than $2 million of home improvements, plus $1.5 million in men’s and women’s jewelry, Pfannenschmidt’s office said.