Enter your email address and start getting breaking law firm and legal news right now!
Brian Callahan’s $96 Million Ponzi Scheme
Brian Callahan, 44, of Old Westbury, New York, raised more than $118 million from at least 40 investors, who were told that their money would be put into mutual funds, hedge funds and securities, according to the statement. It has been reported that the New York money manager used most of the money to support his lifestyle and fund a beachfront resort he owned with his brother-in-law in Montauk, New York.
Prosecutors said that Brian Callahan pleaded guilty to running a $96 million Ponzi scheme that was used to buy luxury homes and cars and also to finance an unprofitable 117-unit resort in eastern Long Island, according to a report by Bloomberg News. His brother-in-law, Adam J. Manson was also indicted by Federal prosecutors back in August.
U.S. Attorney Loretta Lynch in Brooklyn, New York, said in the statement that, “Through lies and deceit, he misled investors and stole investor funds, including investments from a local fire department, to support a lavish lifestyle.” According to Bloomberg News, U.S. Attorney Loretta Lynch reported that, “Callahan used six offshore entities to perpetrate one of the largest investment frauds in Long Island history.”
Among the potential victims was the Montauk Fire Department, Brian Callahan said, according to Newsday, which had initially invested its $600,000 scholarship fund. But department officials have reported that they were suspicious of Brian Callahan’s operation and pulled their money out without a loss before the scheme had collapsed.
Brian Callahan will be sentenced on August 8. If convicted, Brian Callahan will face a maximum sentence of 20 years in prison on each of the securities fraud, wire fraud and conspiracy to commit wire fraud counts, according to CBS News New York. According to a spokesman for the U.S. Attorney’s office, the case against Adam J. Manson, who has pleaded not guilty, is still pending. A lawyer for Callahan, Robert Knuts, did not immediately return a call to his office for comment on the case.
Image Credit: www.newsday.comBrian Callahan's $96 Million Ponzi Scheme by Jaan