Detroit Money Manager Frank Bluestein Barred from Securities Industry, Ordered to Pay Millions for Role in May’s Scheme
Edward May, founder of E-M Management Co. LLC (E-M), pleaded guilty to 59 counts of fraud in 2011 for cheating investors across the nation out of $35 million in a Ponzi scheme. May told investors that his companies held telecommunications contracts with several major hotel chains that guaranteed income of $30,000 - $100,000 per month to each company.
The contracts never existed. May misappropriated funds and used new money to pay earlier investors. As many as 1,200 investors lost their life savings when the scheme collapsed.
May was indicted in 2009, after an SEC complaint claimed he had solicited $250 million in fraudulent investments. According to the SEC, Bluestein was the single largest salesperson in May’s scheme. He allegedly raised around $74 million from more than 800 investors by misrepresenting the securities as safe.
Bluestein has admitted to selling and receiving commissions and referral fees for selling unregistered Edward May securities, but he has denied knowing that the securities were fraudulent. As of now, he has not been charged with any crimes.