Wednesday, May 18, 2011

Another Ponzi scheme - "smart" investors lose $30 million

Hartford Courant

The architect of one of the state's biggest financial frauds — an investment scheme that could result in $30 million in losses and already has cost victims their homes, retirements and college education funds — was sentenced Monday to 10 years in prison.

Michael Goldberg, 40, of Wethersfield, was accused of operating a Ponzi scheme that began by attracting small sums from friends and neighbors and ultimately collapsed under the weight of as much as $25 million put up by so-called sophisticated Florida investors.

Law enforcement experts say they believe that more than $100 million changed hands over the life of the scheme, which began in 1987 and ended in October 2009, when Goldberg turned himself in — first to his lawyer, Richard Brown of Hartford, and days later to the FBI.

Brown said Monday at U.S. District Court that Goldberg confessed because he is a "moral person" who had become consumed by the guilt associated with "living a lie for so long a period of time." But Assistant U.S. Attorney David Novick argued that Goldberg confessed because he could not keep up with the so-called interest payments he was obligated to make to the Florida investors who had begun to sue. [,,,,]

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