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2nd guilty plea in $100M New York Ponzi scam
Question of the Day
CENTRAL ISLIP, N.Y. (AP) - A second New York businessman pleaded guilty for his role in a $100 million Ponzi scheme that helped fund what prosecutors called a failing Hamptons resort.
Adam Manson, 42, of Old Westbury, pleaded guilty in federal court on Long Island Monday to one count of conspiracy to commit securities fraud. The plea came two weeks after Manson’s brother-in-law, Brian Callahan, pleaded guilty in the same courthouse to securities and wire fraud
Callahan admitted raising more than $118 million from investors who were promised the money would be invested in mutual funds, hedge funds and other securities.
Instead, Callahan siphoned off about $96 million. Some of the money was used to purchase the Panoramic View, described in court papers as “an unprofitable 117-unit beachfront resort and residence development in Montauk.”
Manson, who co-owned the resort on the far eastern tip of Long Island with Callahan, admitted Monday that he lied to an auditor looking into the investment funds, and provided fake documents, bogus promissory notes and doctored balance sheets.
“Adam Manson assisted his brother-in-law Brian Callahan in orchestrating one of the largest Ponzi schemes in Long Island history by lying to independent auditors and lending institutions,” U.S. Attorney Loretta Lynch said in a statement. “We hope that the guilty pleas provide some measure of relief and closure to the defrauded investors.”
Prosecutors said Manson has agreed to forfeit all unsold units at the Panoramic View - valued in excess of $60 million, as well as $3.9 million in criminal proceeds. He faces up to five years in prison and restitution of $96 million when he is sentenced Oct. 3.
Callahan faces 20 years or more in prison when he is sentenced in August.
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