NY CPA and Business Owner Sentenced to 5 Years for Gas-Pipeline Investment Scheme
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 investors.
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.