Investment Broker Pleads Guilty to Defrauding Investor of $5 Million in Ponzi Scheme
|U.S. Attorney’s Office April 11, 2012|
PROVIDENCE, RI—Martin B. Feibish, 81, of Providence, Rhode Island, an independent insurance agent, investment broker, and creator of two investment companies, pleaded guilty in federal court in Providence today to defrauding a Florida investor out of approximately $5 million by perpetrating a self-contained Ponzi scheme, announced United States Attorney Peter F. Neronha. Feibish also pleaded guilty to filing a false tax return.
Feibish admitted to the court that between 2001 and February 2011, he induced an investor to invest with him more than $5 million by creating false and fictitious investment schemes. Feibish admitted that he returned only a portion of the funds to the investor and that he falsely and fraudulently represented that the funds were returns on the investor’s investments. Feibish admitted that the funds he provided to the investor were actually the result of a Ponzi scheme he perpetrated with the investor’s own money. Feibish admitted to the court that he induced the victim to invest money with his companies so that he could control the funds and use them for his own benefit.
Feibish also admitted to the court that he filed a false tax return for tax year 2009, claiming income in the negative amount of $94,699. Feibish admitted that he had received income substantially more than the amount he reported.
Appearing before U.S. District Court Judge John J. McConnell, Feibish pleaded guilty to one count of mail fraud and one count of filing a false tax return. He is scheduled to be sentenced on June 29, 2012.
Mail fraud is punishable by a maximum sentence of 20 years in federal prison, three years’ supervised release, and a fine of $250,000. Filing a false tax return is punishable by up to three years in federal prison, three years’ supervised release, and a fine of $1,000,000.
The case is being prosecuted by Assistant U.S. Attorney Luis M. Matos. The matter was investigated by agents from the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigation.