A 62-year-old investment fund manager pleaded guilty at federal court in Central Islip on Monday to securities fraud after operating a nine-year Ponzi scheme that netted more than $17 million.
James Peister agreed to pay $9.6 million in restitution to dozens of victims and to forfeit $17.9 million in assets, including his St. James home and a Hummer, prosecutors said.
“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,” Loretta Lynch, U.S. Attorney for the Eastern District of New York, said in a statement.
Prosecutors said Peister ripped off at least 74 investors through several investments funds—Northstar International Group Inc., North American Globex Group, and North American Globex Fund, LP—between January 2000 and June 2009.
Victims believed they were investing in stocks, futures and fixed income instruments, prosecutors said. Instead, Peister used their money to pay out existing investors, finance his business and pay for his home and Hummer, prosecutors said.
He was able to maintain the fraud by providing phony financial statements to investors and auditors that overstated the value of his clients’ assets, prosecutors said.
The scheme fell apart when the economy collapsed in 2008, prosecutors said. Peister was arrested in June of this year.
Peister is scheduled to be sentenced on March 6, 2015. He faces up to 20 years in prison.