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Matthew Benjamin, 54, used the victims' money for car and house rental payments, food, international travel, legal fees, technology equipment and summer camp tuition for family members, among other purposes, U.S. Attorney for New Jersey Philip R. Sellinger said.
Benjamin, currently of New York, told the victims that his purported company, Clear Solutions Group, had lucrative contracts to purchase closeout or excess cosmetic inventory from one company that he planned to sell to another, Sellinger said.
Benjamin said he had access to the goods through contacts in the cosmetics and fragrance industry, “which he purportedly made through his work at his family’s cosmetic wholesale and distribution business,” the U.S. attorney said.
Instead of investing the money as he promised, however, Benjamin "misappropriated [it] for his own use and benefit,” Sellinger said.
Benjamin gave the victims bogus purchase orders, invoices, promissory notes and bank records that showed inflated assets of Clear Solutions Group, as well as supposed records of the investors’ profits, the U.S. attorney said.
He also told certain investors that “portions of their profits on the investment contracts were being reinvested in additional deals to purchase and sell cosmetics, which in turn would generate more profits,” Sellinger said.
“From time to time, Benjamin made payments to the investors that were purportedly their profits on [non-existent] cosmetics contracts,” he said.
This allowed him to keep the scam going, which “funded Benjamin’s and his family’s lifestyle,” Sellinger said.
Benjamin took a deal from the government rather than risk trial, pleading guilty via teleconference last November to one count each of wire fraud and securities fraud.
He'll have to serve just about all of the sentence because there's no parole in the federal prison system.
In addition to the prison term, U.S. District Judge Claire C. Cecchi sentenced Benjamin on Thursday, March 10, to three years of supervised release. The judge also ordered forfeiture of $1.53 million and that Benjamin pay $909,539 in restitution.
Sellinger credited special agents of the FBI with the investigation leading to the plea and sentence, secured by Assistant U.S. Attorney Jennifer Kozar and Catherine R. Murphy, who's chief of his Economic Crimes Unit in Newark.
He also thanked the U.S. Securities and Exchange Commission’s New York Regional Office for its assistance.
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