Earlier today, we wrote about a Ponzi-schemer in Brooklyn known for his frugality. Despite raking in some $40 million, he apprently ate TV dinners, dressed poorly and worked out of a shabby office with a tiny black and white television.
Philip Barry should have taken some lessons from these guys right across town.
Federal prosecutors today announced charges against three Brooklyn men for a “boiler room” securities fraud operation. And they knew how to party with their filthy lucre.
According to the complaint, investors’ money was spent on strip clubs, clothing, restaurrants, luxury hotels, liquor, car washes, music store purchases, tanning salons and other nice things.
The complaint charges that from 2004 to 2009, the defendants — who were all registered with FINRA at one point — took more than $6 million from at least 50 investors, including the IRA funds of seniors, by selling fraudulent securities in different investment schemes:
In each scheme the defendants allegedly induced investors to send money by lying about the companies or the securities, and subsequently commingling and misappropriating the investors’ money. The complaint charges that Tanwir and Awan trained and then supervised cold-callers who contacted prospective investors. As part of the Exposure Management scheme, the cold-callers were instructed to tell potential investors that they had missed a profitable investment opportunity – based on a stock that had actually increased in value – when the cold-caller had last called them. In fact, there had been no previous call; the scheme relied on the expectation that potential investors would fail to realise that they had never received an earlier call and that the actual rise in the named stock’s price would make the pitch credible and appealing.
It wasn’t the most inventive scheme, but at least the gentlemen lived well for a while. Mr. Barry, at least, is used to the hard life; he’s now on welfare.
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