Branford Resident Charged with Running Ponzi Scheme
|U.S. Attorney’s Office September 14, 2012|
David B. Fein, United States Attorney for the District of Connecticut; Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation; and Robert Bethel, Inspector in Charge, U.S. Postal Inspection Service, Boston Division, today announced that FEISAL SHARIF, 42, of Branford, has been charged by criminal complaint with operating a scheme to defraud multiple investors of at least hundreds of thousands of dollars via a Ponzi scheme.
SHARIF was arrested yesterday at his Branford home. He appeared before United States Magistrate Judge Holly B. Fitzsimmons in Bridgeport and was released on $150,000 bond co-signed by family members. SHARIF also was ordered not to operate First Financial.
“We allege that this defendant operated a Ponzi scheme, using hundreds of thousands of dollars from victim-investors to pay other investors,” stated U.S. Attorney Fein. “I commend the FBI, U.S. Postal Inspection Service, CFTC, and Connecticut’s Department of Banking for their quick and expert work in shutting down this scheme. The investigation is ongoing, and I encourage any potential victims or anyone with information related to this scheme to contact law enforcement.”
Citizens with information that may be helpful to the investigation are encouraged to contact FBI Special Agent Mark Munster at (203) 777-6311.
As alleged in the criminal complaint, SHARIF ran an investment fraud scheme through First Financial, LLC, a firm he operated out of his Branford residence. SHARIF defrauded one victim after taking more than $400,000 of the victim’s funds to invest. As part of the scheme, SHARIF created and e-mailed bogus account statements to convince the victim that his $400,000 investment had appreciated to more than $2.2 million and that the funds were secure. A second victim who invested at least $225,000 with SHARIF received a bogus account statement stating an account balance of more than $1.8 million.
When SHARIF was unable to redeem all of the funds from the victim who had invested more than $400,000, SHARIF admitted to the victim that he had been running a Ponzi scheme, using new investor funds to pay out returns to other investors. The victim reported the fraud to the Federal Bureau of Investigation in July 2012.
The criminal complaint charges SHARIF with wire fraud, a charge that carries a maximum term of imprisonment of 20 years.
U.S. Attorney Fein stressed that a complaint is only a charge and is not evidence of guilt. The defendant is entitled to have this matter presented to a grand jury and, in the event an indictment is returned, he is entitled to a trial at which it will be the government’s burden to prove guilt beyond a reasonable doubt.
This matter is being investigated by the Federal Bureau of Investigation and the United States Postal Inspection Service, with assistance of the Commodity Futures Trading Commission and the State of Connecticut Department of Banking. The case is being prosecuted by Assistant U.S. Attorney Paul Murphy and Senior Litigation Counsel Richard J. Schechter.
In December 2010, the U.S. Attorney’s Office and several law enforcement and regulatory partners announced the formation of the Connecticut Securities, Commodities and Investor Fraud Task Force, which is investigating matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The task force includes representatives from the U.S. Attorney’s Office; Federal Bureau of Investigation; Internal Revenue Service-Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission (SEC); U.S. Commodity Futures Trading Commission (CFTC); Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP); Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich Police Department; and Stamford Police Department.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an e-mail to firstname.lastname@example.org. Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.
On October 1, 2012, the U.S. Department of Justice and the Securities and Exchange Commission are hosting the Northeast Region Investor Fraud Conference. The conference, at the University of Connecticut-Stamford Campus from 9:00 a.m. to 1:00 p.m., is open to members of the community, law enforcement, victim advocates and others interested in detecting and combating an unprecedented rise in Ponzi and other investment fraud schemes that involve thousands of victims and billions of dollars of losses. Conference participants include U.S. Attorneys from Connecticut, Massachusetts, New Jersey, and New York, as well as senior officials from the SEC, FBI, CFTC, and other financial fraud enforcement and regulatory agencies. Individuals interested in attending the conference are encouraged to contact Lori Vernali at Lori.Vernali@usdoj.gov or 860-760-7959.