Keith Epstein, a former Farmington Hills investment adviser, was sentenced
to eight years and one month in prison in connection with a multi-million dollar
Ponzi scheme that ran from late 2006 through 2009.
According to court records, Epstein instructed at least 15 (primarily elderly)
clients to liquidate their legitimate investments so that he could invest
their funds in newer, lower-risk funds. He also instructed them to make
their checks payable directly to him or his company (E&R). He then
diverted the funds, and used investor money to make interest payments
to other investors and for his personal use.
According to an FBI press release, Epstein gained his clients' trust
by regularly visiting them in their homes, revealing personal details
about himself, and attending their important family functions. He also
provided them with gifts and advised them on important life decisions.
Many of his investors lost their entire retirement funds.
Epstein pled guilty to the investment scheme in April of 2011.
In addition to his prison term, Epstein was ordered to pay $4.1 million
in restitution to his victims. His sentence was handed down in the U.S.
District Court in Detroit.