Laurence M. Brown, of Westchester County, was sentenced to five years in
prison recently for his role in a $2 million fraudulent gas-pipeline investment
scheme. According to court documents, Brown (along with his partner) used
his position as a certified public accountant and principal of Marshall
Granger & Company LLP to offer and sell fictitious promissory notes
to unsuspecting investors.
Falsely representing himself as the president of a gas pipeline company
in Tennessee (Infinity Reserves-Tennessee, Inc.), Brown told potential
investors that their funds would go toward upgrading gas meters, compressors,
and other equipment. In reality, Brown had no affiliation with the company.
In fact, according to an SEC complaint filed against Brown and his partner
in 2010, Infinity Reserves was an inoperative company solely owned by
one of Marshall Granger’s client. The company held a single principal
asset – a gas pipeline in Tennessee, which hadn’t functioned
in over ten years.
Brown’s fraudulent pitch to investors included a false valuation
on Infinity Reserves of $5 million and statements that the company was
an alternative energy company. Of the $2.1 million raised from Jan. 2008
to June 2010, Brown misappropriated the vast majority for his personal
use. Approximately $136,550 was used to make Ponzi-style payments to previous
Criminal charges were filed against Brown on July 22, 2010 in federal court.
Over a year later, on Sept. 8, 2011, Brown pled guilty to charges of securities
fraud, wire fraud, and money laundering. In addition to his five years
in prison, Brown faces two years of supervised release. Restitution has
not yet been determined.
"Laurence Brown used his position as an accountant to dupe his clients
and other investors into believing they were making sound investments.
He took advantage of their trust for his own personal enrichment, and
now he will pay for his crimes," said U.S. Attorney Preet Bharara.