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Donald A. Milne III, a 57-year-old repeat offender from Massapequa, defrauded more than 70 victims from throughout the country, U.S. Attorney Philip R. Sellinger said.
All thought they'd invested in what he touted as a “fast-acting form of powdered aspirin that could instantly stop heart attacks and strokes," Sellinger said.
Milne used the money instead for a Caribbean vacation, boating expenses, divorce payments, clothing, and spa treatments -- and to sustain and operate Island Raceway & Hobby Inc., a now-defunct remote-controlled toy race car business in Lindenhurst, the U.S. attorney said.
A much smaller portion of the money went toward paying other investors in a “Ponzi-scheme fashion,” he said.
Milne told the investors this time that their money was being used to cover “normal day-to-day operating expenses” of a company that he called Instaprin Pharmaceuticals, as well as “the costs involved in developing and commercializing its products,” Sellinger said.
It wasn't, he said.
Milne – who’d pleaded guilty to investment fraud charges in a previous case more than 20 years ago -- also lied when he told the victims that he’d assembled a “very strong world-renowned board of directors and medical advisory board” that included industry leaders in fields of science and finance, Sellinger said.
The “false and misleading” assertions didn’t end there, he said.
Sellinger said that Milne -- the purported company's founder, president and chief executive officer -- also told investors that Instaprin:
- had been approved by the U.S. Food and Drug Administration (FDA); as nearing a product launch and public stock offering;
- had contracted with a New Jersey research company for an FDA-approved clinical trial;
- was in negotiations with large pharmaceutical corporations for “imminent” joint busines ventures.
The Securities and Exchange Commission filed a civil complaint against Milne and Instaprin in US District Court in New Jersey in May 2019.
The complaint says that Milne “portrayed himself as an experienced professional in the pharmaceutical industry who was on the cusp of turning his investors’ investments into riches,” when he was, in fact, “a convicted felon who preyed on and defrauded unsuspecting investors.”
Milne already had a history: He was sentenced to probation in 2000 after admitting that he took bribes as a New York boiler-room broker in another securities scam, records show.
Rather than face prosecution again, he took a deal from the government, pleading guilty on Nov. 1, 2021 to securities fraud. Milne must serve just about all of the 56 months because there's no parole in the federal prison system.
In addition to the prison term, U.S. District Judge Michael A. Shipp sentenced Milne to three years of supervised release.
Sellinger credited special agents of the FBI Trenton Resident Agency with the investigation leading to the plea and sentencing, secured by Assistant U.S. Attorney J. Brendan Day, the attorney-in-charge of his Trenton office and Assistant U.S. Attorney Heather Suchorsky of Selinger's Economic Crimes Unit in Newark.
He also thanked the SEC’s Philadelphia Regional Office "substantial assistance" to the investigation.
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ALSO SEE: A now-former product manager at Bergen County-based Stryker Corporation stole $1 million worth of medical equipment that she then resold, authorities charged. READ MORE....
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