FBI Arrests Two Men For Running $100M Ponzi Scheme

FBI Arrests Two Men For Running $100M Ponzi Scheme
<a href="https://pixabay.com/users/PeteLinforth/">PeteLinforth</a> / Pixabay

The FBI has arrested two men, Brian Raymond Callahan and Adam Manson, for running a $100 million Ponzi scheme in New York. The two brothers-in-law have been charged with multiple counts of wire fraud, securities fraud and conspiracy to commit securities fraud, according to a report by Robert E. Kessler and John Valenti of News Day. And according to Eyewitness News, Callahan is also accused of aggravated identity theft.

FBI Arrests Two Men For Running $100M Ponzi Scheme

The Ponzi scheme ran for 6 years

Brian R. Callahan was arrested at his father-in-law’s Old Westbury home, while Adam Manson was arrested at his Manhattan apartment building. Callahan used to run an investment advisory firm, Horizon Global Advisors. Last year, the SEC filed a complaint against him for running a $90 million Ponzi scheme with his wife. The complaint alleged that he had raised money for more than five offshore funds.

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The Department of Justice said that Callahan and Manson raised more than $118 million from investors between 2006 and 2012. They told investors that they wouldl invest the money in different hedge funds, mutual funds and other securities, including one run by Morgan Stanley. Instead, they diverted the money into Adam Manson’s real estate project, siphoning off about $100 million into a large scale Ponzi Scheme.

Ponzi scheme financed luxury automobiles

Prosecutors said Callahan and Manson purchased an unprofitable 117-room beachfront property in Long Island. Moreover, they spent investors’ money to buy luxury cars and homes in Westhampton and Old Westbury. The Department of Justice plans to forfeit the Long Island property, Manson’s home in Westhampton and Callahan’s home in Old Westbury.

FBI officials said that Callahan and Manson ran the Ponzi scheme by providing fake documents, bogus balance sheets and promissory notes to an auditor. The Department of Justice said that the accused have misused investors’ money and manipulated the independent auditor to overstate the profits of their investment firm.

The Securities and Exchange Commission has lately been taking strict actions to prevent Ponzi scheme and fraudulent activities. Last week, the SEC sued a Texas man for running a bitcoin Ponzi scheme.

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