$21 Million Dollar Ponzi Scheme Exposed

$21 Million Dollar Ponzi Scheme Exposed

Patrick E. Churchville, a Rhode Island investment adviser has pleaded guilty to running a massive $21 million ponzi scheme. Churchville used approximately $2.5 million of investor funds to purchase a home in Barrington, Rhode Island. Since the purchase of the home, he has failed to pay almost $1 million in personal federal income taxes, according to a statement from the U.S. Attorney’s Office.

Churchville will plead guilty to one count of tax fraud and five counts of wire fraud, according to the statement. He is also a defendant in a civil case brought forth by the SEC in May 2015.

Ponzi Scheme Revealed

Mr. Churchville invested around $18 million of client funds in JER Receivables between 2008 and 2011. But, by June 2010, he recognized his business ClearPath Wealth Management, had been scammed by JER.

Instead of informing his clients of their losses, he went on to obtain new investors and misappropriate $21 million of their money in the process. In his attempt to conceal his wrongdoing, he told investors JER Receivables was producing high rates of return. In 2011, Chruchville purchased a home in Barrington, R.I., using $2.5 million of investors’ funds as collateral without their consent or knowledge. He then failed to report that sum as income on his personal tax returns, which ended in a $820,000 loss to the IRS.

In a statement from U.S. Attorney Peter F. Neronha he said, “Mr. Churchville, motivated by greed and a desire to live an outlandishly expensive lifestyle, used sleight of hand to swindle dozens of investors out of funds they had properly earned, giving false assurances all along the way. Rather than act in the interest of his clients, he acted only in his own.”

Ponzi Schemes Never Pay Off in the Long Run

Let Starr Austen help you from criminals such Patrick E. Churchville. We have 30 years of experience representing victims of ponzi schemes. Our team of investment fraud lawyers have experience in representing clients who have purchased unsuitable annuities and will fight for the protection of investors and handle cases involving unsuitability, securities arbitration misrepresentation, overconcentration, broker fraud, negligence and breach of trust.