Financial Planner Admits to $2.3 Million Ponzi Scheme
An East Meadow financial planner has admitted to running aPonzi scheme involving approximately $2.3 million. Jay Hoffman pleaded guilty for his
involvement in the scam after allegedly bilking millions from friends
According to Suffolk County prosecutors, the 58-year-old financial planner pleaded guilty to grand larceny and other charges after allegedly stealing $2.3 million from more than 20 unsuspecting investors, which included friends and family members.
Officials report that Mr. Hoffman operated the investment scam between 1989 and 2009 while serving as president of Security Income Planners.
Prosecutors indicate that investors were promised up to 12 percent returns on their investments. They allege that the East Meadow man used money from some investors to make interest payments to other investors. He has also been accused of retaining a portion for himself.
Investors were told that their money was being used to purchase apartments, which were going co-op, purchase debt and real estate, as well as invest with doctors and lawyers.
"He engaged in a typical Ponzi scheme," said District Attorney Spokesman Robert Clifford. "He paid small sums to investors and kept money for his own personal use."
Mr. Hoffman pleased guilty to each count in a 24-count indictment on Friday, December 17, 2010. He was scheduled for sentencing on January 3 by County Court Judge Gary Weber.
Mr. Hoffman’s attorney reported that his client is expected to receive up to seven years in prison.