Investment Adviser Gets 6.5 Years For $1.6M Ponzi Scheme
By John Petrick of Law360.com
A federal judge on Monday sentenced a New Jersey man who pled guilty to running a Ponzi scheme that bilked $1.6 million from his clients to support his luxury lifestyle to six and a half years in prison.
In addition to the prison time, U.S. District Court Judge Gerald J. Pappert in Pennsylvania also ordered defendant Carl Frederic Sealey to pay more than $1.5 million in restitution to the victims of his scheme, federal officials said. About 21 people invested more than $1.6 million with Sealey’s investment firms Global Standard Industries and SEK Industries and lost $1.5 million, according to federal officials.
“Individuals trust investment advisers with their life savings and their economic well-being,” said First Assistant U.S. Attorney Arbittier Williams in a statement. “This defendant blatantly betrayed that trust by making false promises to investors with the ultimate goal of stealing their money and living the high life with their hard-earned savings.”
Sealey is former chairman and chief executive officer of GSI, which federal officials say he claimed was a multinational private equity investment firm with more than 500 employees. The firm, he told clients, specialized in investments of at least $50 million, had more than $15 billion in managed domestic assets and $33 billion offshore, and he led nearly every client to believe that the investments were risk-free and that they would get back their money plus 10 percent interest within 90 days, according to federal authorities.
GSI actually had offices only in Philadelphia and New York City and the firm did not employ 500 investment professionals, according to federal officials. When investors wired money to accounts exclusively maintained by Sealey, rather than investing it, he spent it on extravagant personal indulgences like a personal driver, hotel stays, restaurants, spa services, retail shopping and more, authorities said.
Sealey pled guilty in June to conspiracy to commit wire fraud and wire fraud.
According to his indictment, investors were fooled into thinking that GSI constantly had real estate closings and business takeovers occurring and that the company had “the prearranged liquid capital, leadership expertise and implementation structure to execute the lift-up of entire seasoned professional teams from organizations like Apollo, Citigroup, Morgan Stanley, Goldman Sachs and others.”
Counsel for the parties did not immediately respond to requests for comment late Monday.
Sealey is represented by Evan T.L. Hughes of The Hughes Firm LLC.
The government is represented by Assistant U.S. Attorney Anita Eve.
The case is U.S. v. Sealey, et al., case number 2:17-cr-00347, in the U.S. District Court for the Eastern District of Pennsylvania.
The team of investment fraud lawyers at Starr Austen & Miller LLP fights for the protection of investors and handles cases involving securities arbitration misrepresentation, overconcentration, broker fraud, negligence and breach of trust.