Criminal Justice News

Thursday, June 28, 2012

Investment Broker Sentenced in $5 Million Ponzi Scheme

PROVIDENCE, RI—Martin B. Feibish, 81, of Providence, R.I., an independent insurance agent and investment broker, was sentenced in U.S. District Court in Providence today to five years’ probation, the 12 months to be served in home confinement, for defrauding a Florida investor of approximately $5 million by perpetrating a self-contained Ponzi scheme and for filing a false tax return, announced United States Attorney Peter F. Neronha.

Feibish was also sentenced by U.S. District Court Judge John J. McConnell, Jr. to pay a combined restitution to the victim and Massachusetts Mutual Insurance in the amount of $10,106,209.97. Feibish pleaded guilty on April 11, 2012, to one count each of mail fraud and filing a false tax return.

Feibish admitted to the court that between 2001 and February 2011, he induced an investor to invest with him more than $5 million by creating false and fictitious investment schemes. Feibish admitted that he returned only a portion of the funds to the investor, and falsely represented that the funds were returns on the investor’s investments. Feibish admitted that the funds he provided were actually the result of a Ponzi scheme that he perpetrated with the investor’s own money. Feibish admitted to the court that he used the investor’s funds for his own benefit.

Feibish also admitted to the court that he filed a false tax return for tax year 2009, claiming income in the negative amount of $94,699. Feibish admitted that he had received income substantially more than the amount he reported.

The case was prosecuted by Assistant U.S. Attorney Dulce Donovan. The matter was investigated by agents from the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. The President established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspector generals and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

1 comment:

Anonymous said...

This sentence is absolutely insane. Is this supposed to be "aggressive prosecution"? The lesson learned here is go ahead and steal over $5 million because all that will happen to you is you'll spend a year in your own home. You can bet the crooks are watching this and they'll get to work. Crime sure pays!