Man gets prison for US$100m ponzi scheme
Source: Agencies |
May 18, 2011, Wednesday
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Print Edition
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A MAN who tricked hundreds of investors into giving him more than US$100 million on a promise of fat profits on diamonds and distressed properties was sentenced on Monday to 10 years in prison.
Michael Goldberg, 40, was also ordered to pay at least US$500 a month in restitution after he's released, based on what he can afford, and to undergo substance abuse and mental health evaluations and treatment. He remains free on bail and must report to prison on July 18.
Two of Goldberg's victims testified during the daylong hearing while a prosecutor read comments from other victims. Some people lost their homes, some lost their retirement savings and others lost their children's college money.
Goldberg pleaded guilty last year to three counts of wire fraud in a scheme that lured more than 350 investors over 12 years. He told people he would buy diamonds at very low prices in New York City and then resell them at a profit of up to 25 percent. He also claimed to be buying foreclosed and seized business assets from a bank and reselling them to companies. He promised investors returns of 20 percent per quarter.
But Goldberg didn't buy the diamonds or properties, and he paid promised returns to earlier investors with money he received from new investors, prosecutors said.
About US$100 million changed hands during the scheme, but almost 120 investors were cheated out of more than US$30 million while some profited.
"This was a case of what I consider epic narcissism, epic ego," said federal prosecutor David Novick, who sought a 12 to 15-year prison sentence.
"He needed to feel like he was important. He needed to feel like he was these people's economic savior." Goldberg on Monday apologized to victims for his fraud, and to his family for the pain and shame he has put them through.
Michael Goldberg, 40, was also ordered to pay at least US$500 a month in restitution after he's released, based on what he can afford, and to undergo substance abuse and mental health evaluations and treatment. He remains free on bail and must report to prison on July 18.
Two of Goldberg's victims testified during the daylong hearing while a prosecutor read comments from other victims. Some people lost their homes, some lost their retirement savings and others lost their children's college money.
Goldberg pleaded guilty last year to three counts of wire fraud in a scheme that lured more than 350 investors over 12 years. He told people he would buy diamonds at very low prices in New York City and then resell them at a profit of up to 25 percent. He also claimed to be buying foreclosed and seized business assets from a bank and reselling them to companies. He promised investors returns of 20 percent per quarter.
But Goldberg didn't buy the diamonds or properties, and he paid promised returns to earlier investors with money he received from new investors, prosecutors said.
About US$100 million changed hands during the scheme, but almost 120 investors were cheated out of more than US$30 million while some profited.
"This was a case of what I consider epic narcissism, epic ego," said federal prosecutor David Novick, who sought a 12 to 15-year prison sentence.
"He needed to feel like he was important. He needed to feel like he was these people's economic savior." Goldberg on Monday apologized to victims for his fraud, and to his family for the pain and shame he has put them through.
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