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Ex-Wall Street Trader From Long Island Admits To Running $19M Ponzi Scheme

A former Wall Street trader from Long Island allegedly ran a years-long Ponzi scheme to the tune of nearly $20 million
A former Wall Street trader from Long Island allegedly ran a years-long Ponzi scheme to the tune of nearly $20 million Photo Credit: Vlad Lazarenko via Wikimedia Commons

A former Wall Street trader from Long Island admitted to running a years-long near $20 million Ponzi scheme

Manhasset resident Paul Rinfret, 70, pleaded guilty to securities fraud and wire fraud charges in Manhattan federal court for the scheme to defraud investors by selling limited partnership interests in an entity through which he purported to trade in futures contracts relating to the S&P 500 utilizing a bespoke algorithm he had developed.

According to United States Attorney for the Southern District of New York Geoffrey Berman, Rinfret boasted of “extremely high returns in his trading,” when in reality he simply stole the investors’ money to fund a lavish lifestyle.

Between 2016 and 2019, Rinfret offered potential investors the ability to invest in Plandome Partners through the purchase of limited partnership interests.

When soliciting investments, Rinfret falsely represented to potential and actual investors that he would use all of their investment funds to trade futures contracts tied to the Standard & Poor’s 500 index using a propriety trading algorithm he had developed, taking for himself a fee equivalent to 25 percent of the net profits on the trades.

Through the scheme, Berman said that Rinfret obtained more than $19 million from six victims on the false claim that he would use their money for trading.

Berman noted that only a small portion of his victims’ investments were used in actual trading, and instead, he used the funds to purchase luxury goods and high-end vacation rentals for himself and family members.

According to Berman, when Rinfret did engage in trading with his victims’ money, he generated losses, but to prevent his victims from seeking a return of their money, and to induce further investments, he falsely reported excellent investment performance results.

The results were reported, Berman said, through false and fraudulent monthly account statements that Rinfret typically emailed to the victims. Rinfret also sent fabricated brokerage account statements to his victims.

Rinfret will face up to 20 years in prison when he is sentenced on Feb. 10 next year.

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