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Matthew Benjamin, 53, used the money instead for car and house rental payments, food, international travel, legal fees, technology equipment and summer camp tuition for family members, U.S. Attorney Craig Carpenito 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, Carpenito said.
He said he had access to these closeout goods through his 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, Benjamin misappropriated the investor’s money for his own use and benefit,” Carpenito said.
Benjamin gave them 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, he 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,” Carpenito 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,” the U.S. attorney said.
Carpenito credited special agents of the FBI with the investigation leading to the plea, secured by Assistant U.S. Attorney Jennifer Kozar 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. A civil complaint filed by the SEC following Benjamin’s arrest this past July is still pending.
U.S. District Judge Claire C. Cecchi scheduled sentencing for March 24 following Benjamin’s teleconferenced plea to wire and securities fraud.
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