Financial Fraud: WILLIAM J. WELLS Sentenced For Securities – Wire Fraud and Ponzi-Like Scheme

<h2>Man Sentenced In Manhattan Federal Court To 46 Months In Prison In Connection With &dollar;1&period;5 Million Ponzi Scheme<&sol;h2>&NewLine;<p>Preet Bharara&comma; the United States Attorney for the Southern District of New York announced that WILLIAM J&period; WELLS was sentenced today in Manhattan federal court to 46 months in prison for <strong>securities and wire fraud<&sol;strong> charges stemming from his <strong>scheme to defraud<&sol;strong> more than 30 investors&comma; including friends&comma; colleagues&comma; and family&comma; of more than &dollar;1&period;5 million through a <strong>Ponzi-like scheme<&sol;strong>&comma; over the course of nearly six years until his arrest in October 2015&period;  WELLS was arrested on October 1&comma; 2015&comma; and pled guilty on March 18&comma; 2016&comma; before United States Magistrate Judge Henry B&period; Pitman&period;  Today’s sentencing was presided over by United States District Judge Kimba M&period; Wood&period;<&sol;p>&NewLine;<div class&equals;"mh-content-ad"><script async src&equals;"https&colon;&sol;&sol;pagead2&period;googlesyndication&period;com&sol;pagead&sol;js&sol;adsbygoogle&period;js&quest;client&equals;ca-pub-9162800720558968"&NewLine; crossorigin&equals;"anonymous"><&sol;script>&NewLine;<ins class&equals;"adsbygoogle"&NewLine; style&equals;"display&colon;block&semi; text-align&colon;center&semi;"&NewLine; data-ad-layout&equals;"in-article"&NewLine; data-ad-format&equals;"fluid"&NewLine; data-ad-client&equals;"ca-pub-9162800720558968"&NewLine; data-ad-slot&equals;"1081854981"><&sol;ins>&NewLine;<script>&NewLine; &lpar;adsbygoogle &equals; window&period;adsbygoogle &vert;&vert; &lbrack;&rsqb;&rpar;&period;push&lpar;&lbrace;&rcub;&rpar;&semi;&NewLine;<&sol;script><&sol;div>&NewLine;<p>U&period;S&period; Attorney Preet Bharara said&colon; &OpenCurlyDoubleQuote;William Wells repeatedly lied to his investors&comma; falsely claiming positive returns when his trading was&comma; in fact&comma; calamitous&period;  Buttressing his lies with fake account statements&comma; he used investor money to pay personal expenses and to pay back other investors&period;  For depriving his clients of their money – and sometimes their life savings – Wells has been sentenced to a substantial term in prison&period;”<&sol;p>&NewLine;<p>Among other false and misleading statements&comma; WELLS lied to prospective and existing investors by representing&comma; including in fictitious account statements prepared by WELLS&comma; that he had achieved consistently positive trading returns&period;  In fact&comma; WELLS’s trading was remarkably unsuccessful and he realized trading losses every year from 2009 until his arrest in October 2015&period;  Of the money WELLS did not lose in securities trading&comma; WELLS routinely converted investor funds to his own use to pay personal expenses and used new investor funds to pay back other investors in a Ponzi-like fashion&period;<&sol;p>&NewLine;<p>Many of WELLS’s victims&comma; several of whom submitted letters to the Court or spoke today at WELLS’s sentencing&comma; lost their life savings to <em>WELLS’s scheme<&sol;em>&comma; <strong>including money saved for retirement&comma; medical bills&comma; tuition&comma; or wedding costs&comma; or to purchase a family home<&sol;strong>&period;<&sol;p>&NewLine;<p>According to the Complaint&comma; the Indictment&comma; and statements made in open court&comma; including at the sentencing proceeding today&colon;<&sol;p>&NewLine;<p>From September 2009 through the present&comma; WELLS&comma; through his investment firm Promitor Capital LLC &lpar;&OpenCurlyDoubleQuote;Promitor Capital”&rpar;&comma; engaged in a <em>fraudulent scheme<&sol;em> to obtain investments by falsely representing that he had achieved consistently positive trading returns in the U&period;S&period; equity markets&comma; including through the successful use of options to hedge risk&period;  In truth&comma; WELLS’s trading was remarkably unsuccessful&period;  Between 2009 and the present&comma; WELLS realized trading losses every year and&comma; in total&comma; trading losses in excess of &dollar;500&comma;000&period;  In fact&comma; as of September 2015&comma; Promitor Capital had less than &dollar;1&comma;000 under management&period;<&sol;p>&NewLine;<p>In connection with the scheme&comma; WELLS made a series of false and misleading representations to investors&comma; including&colon; &lpar;a&rpar; that WELLS’s trading was generating consistently positive returns when&comma; in fact&comma; his trading was consistently unsuccessful&semi; &lpar;b&rpar; that investors were invested in certain stocks at certain times when&comma; in fact&comma; none of the accounts held by Promitor or WELLS held those stocks&semi; and &lpar;c&rpar; that WELLS had created so-called sub-accounts for clients&comma; for which WELLS purported to execute individualized trading strategies&comma; when&comma; in fact&comma; no such sub-accounts were ever funded&period;  In addition to false and misleading representations made orally and in writing&comma; WELLS also generated wholly fictitious account statements that he provided to his clients&period;<&sol;p>&NewLine;<p>As a result of these misrepresentations&comma; WELLS obtained more than &dollar;1&period;5 million in investments from more than 30 investors&comma; many of whom were friends&comma; colleagues&comma; or family members&period; Of the money he did not lose in securities trading&comma; WELLS routinely converted investor funds to his own use in the form of cash withdrawals and to pay personal expenses&comma; including more than &dollar;500&comma;000 for&comma; among other things&comma; credit card bills&comma; payments for WELLS’s automobile&comma; and for private school tuition&period;  In addition&comma; to hide his trading losses and continue to fund his personal lifestyle&comma; WELLS used new investor funds to pay back other investors in a <strong>Ponzi-like fashion<&sol;strong>&period;  In total&comma; WELLS distributed less than approximately &dollar;500&comma;000 back to investors&period;<&sol;p>&NewLine;<p class&equals;"rtecenter">&lbrack;separator type&equals;&&num;8221&semi;thin&&num;8221&semi;&rsqb;<&sol;p>&NewLine;<p>In addition to the 46-month prison sentence&comma; WELLS&comma; 43&comma; formerly of Manhattan and New Jersey&comma; now living in Valley Cottage&comma; New York&comma; was sentenced to three years of supervised release&period;  The Court further ordered WELLS to forfeit the proceeds of the scheme and to pay restitution in an amount to be determined&period;<&sol;p>&NewLine;<p>Mr&period; Bharara praised the work of the Federal Bureau of Investigation and thanked the U&period;S&period; Securities and Exchange Commission for their assistance with the investigation&period;<&sol;p>&NewLine;<p>The charges were brought in connection with the President’s <a class&equals;"wpil&lowbar;keyword&lowbar;link" href&equals;"https&colon;&sol;&sol;www&period;fraudswatch&period;com&sol;tag&sol;financial-fraud&sol;amp&sol;" title&equals;"Financial" data-wpil-keyword-link&equals;"linked" data-wpil-monitor-id&equals;"593">Financial<&sol;a> Fraud Enforcement Task Force&period;  The task force was established to wage an aggressive&comma; coordinated and proactive effort to investigate and prosecute <strong>financial crimes<&sol;strong>&period;  With more than 20 federal agencies&comma; 94 U&period;S&period; attorneys’ offices&comma; and state and local partners&comma; it is the broadest coalition of law enforcement&comma; investigatory and regulatory agencies ever assembled to <em>combat fraud<&sol;em>&period;  Since its formation&comma; the task force has made great strides in facilitating increased investigation and prosecution of <em>financial crimes<&sol;em>&semi; enhancing coordination and cooperation among federal&comma; state and local authorities&semi; addressing discrimination in the lending and financial markets&semi; and conducting outreach to the public&comma; victims&comma; financial institutions&comma; and other organizations&period;  Since the fiscal year 2009&comma; the Justice Department has filed over 18&comma;000 <strong>financial fraud<&sol;strong> cases against more than 25&comma;000 defendants&period;  For more information on the task force&comma; please visit <a href&equals;"http&colon;&sol;&sol;www&period;stopfraud&period;gov&sol;"><u>www&period;StopFraud&period;gov<&sol;u><&sol;a>&period;<&sol;p>&NewLine;<p>This case is being handled by the Office’s Securities and Commodities Fraud Task Force&period;  Assistant U&period;S&period; Attorney Andrea M&period; Griswold is in charge of the prosecution&period;<&sol;p>&NewLine;<p><a href&equals;"https&colon;&sol;&sol;www&period;justice&period;gov&sol;usao-sdny&sol;pr&sol;man-sentenced-manhattan-federal-court-46-months-prison-connection-15-million-ponzi">Original PressReleases &&num;8230&semi;<&sol;a><&sol;p>&NewLine;

Financial FraudPonzi-Like Schemewire fraud