A Pennsylvania man has pleaded guilty to charges that he ran a $17.6 million Ponzi scheme at his hedge fund.
Robert Stinson entered his plea on wire fraud, mail fraud, bank fraud, money laundering, obstruction of justice, filing false tax returns and making false statements to federal agents charges in Philadelphia federal court yesterday. He faces up to 329 years in prison and a $6.8 million fine on the 26 charges, although federal sentencing guidelines suggest he'll spend between 27 and 34 years in prison.
According to prosecutors, Stinson recruiting 260 investors for his Life's Good fund between 2006 and 2008, using telemarketers to cold-call potential clients. He used the proceeds to pay himself and relatives who set up hopeless business endeavors with fund money, as well as on luxury items, in addition to the Ponzi scheme payments. Stinson also allegedly lied about his education and promised investors returns of between 10% and 16%.
Stinson, who also faces a Securities and Exchange Commission lawsuit, will be sentenced on Dec. 13.