James Peister, an investment fund manager from St. James, New York, pleaded guilty in federal court this week to securities fraud, having run a Ponzi scheme that lasted almost a decade and bilked investors out of over $17 million. Peister will pay $9.6 million in restitution to his victims and will concede $17.9 million in assets, including his home and a Hummer.
According to Loretta Lynch, U.S. Attorney for the Eastern District of New York, “For nearly a decade, rather than make sound investment decisions as he had promised, James Peister fleeced dozens of investors and used their money to fund his own lavish lifestyle.”
Prosecutors believe that Peister defrauded more than 74 investors between January 2000 and June 2009 through a number of investment funds, including Northstar International Group, Inc., North American Globex Group, and North American Globex Fund, LP.
Peister represented to his victims that they would be investing in stocks, futures, and fixed income instruments. Rather, Peister is believed to have used money from new investors to pay back earlier investors, the defining element of a Ponzi scheme. Peister also allegedly used the funds to finance his business and to pay for his house and Hummer.
Peister was able to keep the scheme running for so long because he gave false financial statements to investors and auditors that exaggerated the value of his clients’ assets. The scheme finally unraveled when the economy collapsed in 2008.
Peister will be sentenced on March 6, 2015 and faces up to twenty years imprisonment.
If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.