United States Attorney
District of Connecticut
Friday, September 14, 2012
Connecticut Resident Charged with Running Ponzi Scheme
NEW HAVEN, Conn. – Feisal Sharif, 42, of Branford, Conn., was charged by criminal complaint with operating a scheme to defraud multiple investors of at least hundreds of thousands of dollars via a Ponzi scheme, announced David B. Fein, U.S. Attorney for the District of Connecticut; Kimberly K. Mertz, Special Agent in Charge of the New Haven Division of the FBI; and Robert Bethel, Inspector in Charge, U. S. Postal Inspection Service, Boston Division.
Sharif was arrested yesterday at his Branford home. He appeared before U.S. Magistrate Judge Holly B. Fitzsimmons in Bridgeport, Conn., and was released on a $150,000 bond co-signed by family members. Sharif also was ordered not to operate First Financial LLC, a firm he operated out of his Branford residence.
“We allege that this defendant operated a Ponzi scheme, using hundreds of thousands of dollars from victim-investors to pay other investors,” stated U.S. Attorney Fein. “I commend the FBI, U.S. Postal Inspection Service, CFTC and Connecticut’s Department of Banking for their quick and expert work in shutting down this scheme. The investigation is ongoing, and I encourage any potential victims or anyone with information related to this scheme to contact law enforcement.”
Citizens with information that may be helpful to the investigation are encouraged to contact FBI Special Agent Mark Munster at (203) 777-6311.
As alleged in the criminal complaint, Sharif ran an investment fraud scheme through First Financial. Sharif defrauded one victim after taking more than $400,000 of the victim’s funds to invest. As part of the scheme, Sharif created and emailed bogus account statements to convince the victim that his $400,000 investment had appreciated to more than $2.2 million and that the funds were secure. A second victim who invested at least $225,000 with Sharif received a bogus account statement stating an account balance of more than $1.8 million.
When Sharif was unable to redeem all of the funds from the victim who had invested more than $400,000, Sharif admitted to the victim that he had been running a Ponzi scheme, using new investor funds to pay out returns to other investors. The victim reported the fraud to the FBI in July 2012.
The criminal complaint charges Sharif with wire fraud, a charge that carries a maximum term of imprisonment of 20 years.
U.S. Attorney Fein stressed that a complaint is only a charge and is not evidence of guilt. The defendant is entitled to have this matter presented to a grand jury and, in the event an indictment is returned, he is entitled to a trial at which it will be the government’s burden to prove guilt beyond a reasonable doubt.
This matter is being investigated by the FBI and the U.S. Postal Inspection Service, with assistance of the U.S. Commodity Futures Trading Commission (CFTC) and the State of Connecticut Department of Banking. The case is being prosecuted by Assistant U.S. Attorney Paul Murphy and Senior Litigation Counsel Richard J. Schechter.
In December 2010, the U.S. Attorney’s Office for the District of Connecticut and several law enforcement and regulatory partners announced the formation of the Connecticut Securities, Commodities and Investor Fraud Task Force, which is investigating matters relating to insider trading, market manipulation, Ponzi schemes, investor fraud, financial statement fraud, violations of the Foreign Corrupt Practices Act, and embezzlement. The Task Force includes representatives from the U.S. Attorney’s Office; FBI; Internal Revenue Service – Criminal Investigation; U.S. Secret Service; U.S. Postal Inspection Service; U.S. Department of Justice’s Criminal Division, Fraud Section and Antitrust Division; U.S. Securities and Exchange Commission; CFTC; Office of the Special Inspector General for the Troubled Asset Relief Program; Office of the Chief State’s Attorney; State of Connecticut Department of Banking; Greenwich Police Department and Stamford Police Department.
Citizens are encouraged to report any financial fraud schemes by calling, toll free, 855-236-9740, or by sending an email to firstname.lastname@example.org. Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.
To report financial fraud crimes, and to learn more about the President’s Financial Fraud Enforcement Task Force, please visit www.stopfraud.gov.