Source- http://www.fbi.gov/atlanta/press-releases/2012/two-new-york-residents-sentenced-for-operating-12-million-ponzi-scheme
ATLANTA—Andrew S. Mackey, 62, of Cedarhurst, New York, was sentenced on November 9, 2012, by United States District Judge William S. Duffey, Jr. to serve 27 years in federal prison for operating a Ponzi scheme. Mackey’s co-defendant and common-law wife, Inger L. Jensen, 54, also of Cedarhurst, was sentenced on August 21, 2012, to serve 14 years. The defendants were convicted by a jury of 15 counts of wire fraud, mail fraud, and conspiracy on May 16, 2012, after an eight-day trial.
United States Attorney Sally Quillian Yates said, “Although we have prosecuted many multi-million-dollar Ponzi schemes in recent years, defendant Mackey’s sentence is the longest imposed in this district for a case of this type. These con artists cheated more than 150 investors out of more than $12 million by promising to invest the money in high-yield investment programs. We hope that the sentences imposed in this case will serve as a warning to anyone who is considering defrauding investors in this district.”
Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “The lengthy sentences seen in this case reflect the damage done to the victim investors by these two defendants. While the FBI is prepared to dedicate substantial investigative resources to address these fraudulent Ponzi investment schemes, we also take every opportunity to educate the public in avoiding such investment scams in the first place. Anyone with information or concerns regarding such matters should contact their nearest FBI Field Office.”
Mackey was sentenced to 27 years in prison, to be followed by three years of supervised release, and he was ordered to pay restitution in the amount of $6,650,067.
According to United States Attorney Yates, the charges, and other information presented in court: The evidence presented at trial showed that from 2003 through 2007, Mackey and Jensen owned and operated ASM Financial Funding Corporation in Valley Stream, New York. Mackey and Jensen held themselves out to the public as investment advisors and financial experts who catered only to a small and select group of sophisticated investors. They falsely represented to the investors that they would use their sources to place investors’ money in private and confidential offshore business deals designed to promote the financial stability of select qualified individuals; that investors would earn up to 20 percent interest per month; that investors could choose to reinvest their earnings or receive monthly interest payments from ASM; and that investors’ earnings would be based on “trade proceeds.” Mackey and Jensen paid commissions to brokers they called “intermediaries” to help them recruit new investors. The intermediaries believed that the defendants’ promises were true and, in turn, repeated the defendants’ false promises to the investors.
As a result of these false representations, and with the assistance of the unwitting Intermediaries, more than 150 people invested a total of more than $12 million in Mackey and Jensen’s fraudulent scheme. The evidence showed that Mackey and Jensen invested less than one-third of the money they took from the investors, and they never generated any profits whatsoever with the investors’ money. Moreover, Mackey and Jensen lost the entire amount that they invested on behalf of the investors. Mackey and Jensen used the other two-thirds of the investors’ money to operate their fraudulent scheme, to pay their own personal expenses and to pay make-believe profits to some of the early investors to give ASM an air of legitimacy.
The evidence showed that all of the money that Mackey and Jensen distributed to the investors as purported interest payments came not from trade proceeds but from the investors’ own money. Nevertheless, the defendants led the investors to believe that ASM was earning profits by distributing phony monthly statements and 1099-INT forms, which showed that the investors had earned interest income, and that their investments were safe and secure.
ASM stopped paying make-believe profits to the investors in February 2006 and thereafter tried to lull the investors into a false sense of security to delay or prevent their complaints to law enforcement by promising that additional payments would be forthcoming and by telling the investors that talking to law enforcement would make it less likely that any of the investors would receive additional payments. Witnesses at trial included several Intermediaries and numerous investors who were victimized by the scheme.
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