Jewelry Wholesaler Indicted for $200 Million Ponzi Scheme
Defendant Allegedly Promised Falsely High Rates of Return for Investments in Wholesale Jewelry Purchases
An indictment was unsealed today in federal court in Brooklyn charging Gregory Altieri, the president of LNA Associates, with one count of wire fraud for allegedly running a two-year, $200 million Ponzi scheme based on nonexistent wholesale jewelry deals and false promises of inflated returns. Altieri was arrested today and will be arraigned this morning via video conference before United States Magistrate Judge James Orenstein.
Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the arrest and charge.
According to the indictment, beginning in August 2017, Altieri solicited between $75 million to $85 million from over 80 investors from Queens, Staten Island, Long Island and elsewhere, allegedly to purchase jewelry at “closeout” prices and resell it at a high profit. Altieri promised returns of between 30 and 70 percent in a matter of months. While Altieri initially purchased some jewelry with investors’ money, in approximately May 2018 he began to use new investors’ money to pay earlier investors, representing to the latter group that they were receiving returns on their investments. These purported “returns” were used by Altieri to convince the earlier investors to keep their money with LNA Associates, by “rolling over” their investments into new investments based on false promises to use this money to purchase additional jewelry. By January 2020, when Altieri stopped making paybacks to investors, he owed them approximately $200 million based on the falsely inflated promised returns.
“As alleged, Altieri defrauded investors, including retirees living off their pensions, by representing that he was buying and reselling jewelry for big profits, which was a lie,” stated Acting United States Attorney DuCharme. “This Office is committed to protecting the investing public from con artists who would prey upon our community.”
“Stealing millions based on false promises made to retirees who rely on their pensions is contemptible. We allege Mr. Altieri knew he was going to have problems paying off his first round of investors, but he kept his con going anyway. As a result of his actions, the FBI has provided him with stainless steel jewelry for his wrists today, and a guarantee of working to hold him and others who commit similar frauds accountable for their behavior,” stated FBI Assistant Director-in-Charge Sweeney.
The charge in the indictment is an allegation, and the defendant is presumed innocent unless and until proven guilty. If convicted, Altieri faces a maximum sentence of 20 years’ imprisonment.
The government’s case is being handled by the Office’s Business & Securities Fraud Section. Assistant United States Attorneys Andrey Spektor and Lindsay K. Gerdes are in charge of the prosecution, assisted by EDNY Special Agent Martin Sullivan.
Melville, New York
E.D.N.Y. Docket No. 20-CR-249 (BMC)