News and Press Releases

Investment Manager Sentenced to 20 Years of Imprisonment for Operating 30-year Ponzi Scheme

FOR IMMEDIATE RELEASE
June 17, 2011

Brooklyn-Based Defendant Induced Hundreds of Individuals Throughout the United States to Invest More than $40 Million

Philip Barry, a former investment manager who was based in Bay Ridge, New York, was sentenced today to 20 years of imprisonment by United States District Judge Raymond J. Dearie at the federal courthouse in Brooklyn. In November 2010, Barry was convicted after trial on all counts of a 34-count indictment charging securities fraud and mail fraud for operating a long-standing and large-scale Ponzi scheme. As part of the sentencing, Judge Dearie ordered Barry to pay restitution of $24,146,540.

The sentencing was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York.

Barry began accepting money in the late 1970s from individuals seeking a return on investment, and he eventually called his business “the Leverage Group.” Barry told potential investors that the Leverage Group invested in stock options. To induce investments and discourage withdrawals, Barry, among other things, guaranteed specified positive rates of return, issued account statements that showed growing account balances, represented that investing in the Leverage Group was safe, and promised that withdrawals could be made easily.

The evidence at trial established that Barry actually was running a Ponzi scheme, paying returns to Leverage Group investors not from any profits earned on investments, but rather from existing investors’ deposits or money paid by new investors. Barry never produced or earned the rates of return that he advertised and cited in clients’ account statements. Rather, the positive rates of return were simply pre-determined interest rates made up by Barry.

In announcing the sentencing, United States Attorney Lynch expressed her grateful appreciation to the Federal Bureau of Investigation, the agency responsible for leading the government’s investigation, and thanked United States Securities & Exchange Commission for its assistance.

The government’s case was prosecuted by Assistant United States Attorneys Jeffrey A. Goldberg and John P. Nowak.

The Defendant:

PHILIP BARRY
Age: 53

 

 



USAO 			Homepage
USAO Briefing Room
Red Ribbon Week October 23-31
victims Witnesses Assistance

The Department of Justice believes that it is important to keep victims/witnesses of federal crime informed of court proceedings and what services may be available to assist you.

Community Outreach

Giving Back to the Community through a variety of venues & initatives.

stopfraud.gov

Report Fraud

Stay Connected: Visit us on Twitter
What Makes Schools Safer? Using science to discover what works. Federal funding available. Visit NIJ.gov, keywords: 'comprehensive school safety intiative'