Farmington Hills Investment Adviser Gets 8 Years in Prison for Defrauding Elderly Investors
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.