A Brooklyn man is on trial for securities fraud after allegedly duping
more than 800 investors out of millions in a
Ponzi scheme. Phillip Barry has been accused of misleading investors by telling them
that their money was being used to invest in stocks when in truth, Mr.
Barry used the funds to invest in land.
Prosecutors have accused Mr. Barry of accepting money from unsuspecting
investors in exchange for guaranteed rates of returns. However, a majority
of the proceeds supposedly went to pay off original clients.
In addition to running a Ponzi scheme, which Mr. Barry mistakenly admitted
to, he has also been accused of committing stock fraud.
Mr. Barry ran his operation out of a storefront in the Bay Ridge section
of Brooklyn under his company Leverage Group, which guaranteed high rates
Mr. Barry’s clients claim that they were told that their money was
being used to invest in the stock market. However, it appears that Mr.
Barry was using the funds to purchase vacant land with the intentions
to later develop.
“This is a case about a con man,” said Assistant U.S. Attorney
Jeffrey A. Goldberg in his opening statement. “Phillip Barry repeatedly
lied to his clients to get their money and now their money is gone.”