TRENTON, NJ—A Colts Neck, New Jersey, man who defrauded dozens of investors today admitted operating a $20 million Ponzi scheme out of his Fair Haven, New Jersey office and Miami residence, U.S. Attorney Paul J. Fishman announced.

Louis J. Spina, 57, pleaded guilty before U.S. District Judge Anne E. Thompson in Trenton federal court to an information charging him with one count of wire fraud.

According to documents filed in this case and statements made in court:

Spina admitted he solicited victims to invest through his business, LJS Trading, LLC. After receiving the funds, Spina provided each investor with a note specifying a guaranteed monthly rate of return, typically ranging from nine to 14 percent. Between August 2010 and November 2013, Spina collected $20 million from 36 investors and deposited the funds into the LJS bank account.

Over the course of the scheme, Spina only transferred $9.5 million of the investor funds into a trading account. He used the remaining $10.5 million to pay the investors’ monthly interest payments, return portions of some investors’ principals, and to pay for his own personal expenses, including car purchases, luxury apartment rental payments, and a $400,000 donation to a private university.

Spina admitted he lied to investors about the status of their funds, telling them they were making large gains despite the fact he lost all of the $9.5 million that was actually invested. When certain investors became suspicious, he reassured them by sending misleading screen shots of their account balances that reflected only temporary gains, not the total daily losses. In addition, Spina was able to defraud his investors out of an additional $1.7 million by fabricating a story about a wealthy individual planning to buy LJS, which he told them would result in a 14 to 30 percent return on their investment. Altogether, Spina’s scheme cost investors a total of $12.7 million.

The wire fraud count to which Spina pleaded guilty carries a maximum potential penalty of 20 years in prison and $250,000 fine or twice the gross gain or loss from the offense. Spina will also be ordered to pay restitution at sentencing, currently scheduled for Feb. 26, 2015.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford in Newark, New Jersey; and the U.S. Secret Service, under the direction of Assistant Special Agent in Charge Carl Agnelli in Newark, for their work in the investigation.

The government is represented by Assistant U.S. Attorney Sarah M. Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.