James Risher, of Sanibel, Florida, has been sentenced to 19 years and 7 months in federal prison for charges related to his role in a Ponzi scheme that defrauded 106 investors in Florida and North Carolina out of approximately $21 million. Many of the investors were retirees and schoolteachers.
According to court documents, Risher solicited investments in a fraudulent private equity fund called "The Preservation of Principal Fund." He hid his scheme by issuing falsified reports that showed the fund was profitable, and used new investor funds to make Ponzi payments to older investors. In addition to lying about his background, Risher also neglected to tell his clients that he had been previously convicted of securities fraud.
The SEC filed similar charges against Risher and a partner in Aug. 2011.
"Risher boasted to investors that he had substantial experience in trading equities and providing wealth and asset management services," wrote the SEC in a Aug. 29 press release. "In reality, Risher had no such experience but rather a lengthy criminal history, spending 11 of the last 21 years in jail instead of growing a thriving retail brokerage business as he claimed."
Risher plead guilty to mail fraud, money laundering, and engaging in an illegal monetary transaction in September. In addition to his prison sentence, Risher was ordered to forfeit $12.4 million, several luxury vehicles, expensive jewelry, and a painting.