Rockland County Accountant Swindled Clients and Friends in Loan and Embezzlement Scheme for Over a Decade

Preet Bharara, the United States Attorney for the Southern District of New York announced today that ALAN RITTER, a self-employed accountant in Rockland County, New York, pled guilty in Manhattan federal court to wire fraud in connection with his operation of an 11-year, $6 million Ponzi scheme. RITTER pled guilty earlier today before U.S. Magistrate Judge Debra Freeman.

Manhattan U.S. Attorney Preet Bharara said: “Alan Ritter used his trusted role as an accountant to hatch a fraudulent loan scheme that quickly grew into a multi-million dollar Ponzi scheme. He leaves many victims, whom he knew personally, impoverished in the wake of his fraud. With his plea today, Ritter will now be held to account for his crimes.”

According to the Information and statements made during today’s guilty plea proceeding:

RITTER operated his own accounting practice in Rockland County, New York. In 2001, he suffered more than $500,000 in losses from an unrelated business venture. In order to cover those losses, RITTER solicited hundreds of thousands of dollars in loans from friends and clients of his accounting practice, falsely telling them that he intended to use the money to invest in real estate ventures.

Thereafter, RITTER began to operate a Ponzi scheme, borrowing more and more money from friends and clients by telling them that it would be put to use in various business ventures, when in fact, RITTER used the money to cover the interest payments on all of the preceding loans and to pay for his own personal expenses. RITTER operated this Ponzi scheme until 2012.

In addition to obtaining loans through fraud, RITTER also embezzled funds entrusted to him by several clients, using their money to cover the interest payments on the Ponzi scheme loans and to pay for his personal expenses. For example, in November 2011, RITTER was given $650,000 on behalf of a family and was instructed to use a portion of it to satisfy several of the family’s outstanding debts. The remainder of the funds was to be held pending further instructions. Instead, RITTER embezzled at least $530,000 of the original $650,000.

RITTER, 69, of Monsey, New York, pled guilty to three counts of wire fraud. He faces a statutory maximum sentence of 20 years in prison on each count, a fine of $250,000, or twice the gross gain or loss from the offense, and a maximum period of three years of supervised release. RITTER is scheduled to be sentenced by United States District Judge Paul A. Crotty on January 16, 2013.

Mr. Bharara praised the investigative work of the Criminal Investigators of the United States Attorney’s Office for the Southern District of New York.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force, on which Mr. Bharara serves as a Co-Chair of the Securities and Commodities Fraud Working Group. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorney Michael A. Levy is in charge of the prosecution.

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