A Huntington man was sentenced Thursday to 4 ½ years in federal prison for defrauding investors out of $31 million.
Thomas Donovan had pleaded guilty to wire fraud conspiracy in 2013 at Central Islip federal court.
“Under the guise of rehabilitating and reselling distressed mortgages, Donovan lied to his investors and stole their money,” said Kelly Currie, acting U.S. Attorney for the Eastern District of New York. “Donovan took advantage of the residential mortgage crisis for his personal financial gain.”
Prosecutors said the 67-year-old man, the co-owner of Private Capital Group (PCG), which invested in sub-prime mortgages, stole some of the $300 million from their main investor, Ficus Investments, Inc., and covered the theft up with false and misleading financial reports.
PCG co-owner Lawrence Cline and the company’s chief financial officer, Christopher Chalavoutis, previously pleaded guilty and have been sentenced.
Judge Joanna Seybert also ordered Donovan to pay $31 million in restitution to his victims.