United States Attorney for the Eastern District of Pennsylvania Announces Participation in National Money Mule Initiative; Obtains Three Civil Injunctions Against Alleged Money Mules Involved in Lottery Scams
PHILADELPHIA – United States Attorney William M. McSwain announced that Todd H. Lahr, 60, of Nazareth, PA, pleaded guilty today to one count of conspiracy to commit securities fraud and wire fraud, two counts of securities fraud, and four counts of wire fraud. United States District Judge Edward G. Smith presided over the guilty plea hearing in Easton via video teleconference.
Lahr, an attorney licensed to practice law in Pennsylvania, perpetrated a multiyear securities fraud scheme that targeted his own law clients. The scheme involved the fraudulent sale of the securities of two entities, THL Holdings, LLC and Ferran Global Holdings, Inc. Lahr raised funds for the two companies by soliciting investments from his clients, telling them that their money would be used for a variety of business opportunities which were, in fact, non-existent.
Lahr initially sold THL Holdings investments, promising that the money raised would be used to pursue specific business opportunities, including mining operations in Papua New Guinea and the acquisition of the shares of a penny stock. In reality, the money was used for Lahr’s personal expenses and to make Ponzi scheme payments to prior investors, among other things. Once Lahr realized that he was running out of investor money to pay the THL Holdings investors, he sought investors for a second entity, Ferran. He told the Ferran investors that their money would be used for business opportunities, including even more mining in Papua New Guinea and residential property leases in Spain and England—but, in fact, these funds were used to repay the prior THL Holdings investors and for Lahr’s personal expenses to fund his lifestyle. Among these personal expenses were his home mortgage, his child’s school tuition, utility bills, and other personal debt. Total investor losses are estimated to be over $2.7 million.
Even after he was caught, Lahr continued his deception by lying in sworn testimony before the U.S. Securities and Exchange Commission (SEC). In this testimony, Lahr denied writing checks to his personal accounts from the THL Holdings accounts, when, in fact, he had written at least 25 separate checks to himself over a three-year period.
In addition to these criminal charges, the SEC filed a parallel civil enforcement action in the Eastern District of Pennsylvania last month based on the same course of conduct. The SEC Complaint charges Lahr and another individual, Thomas Megas, with multiple securities fraud violations and seeks disgorgement, prejudgment interest, civil money penalties, and injunctions against future violations of the federal securities laws against both defendants.
“Lahr targeted the very people to whom he owed a duty of loyalty: his own law clients,” said U.S. Attorney McSwain. “He stole millions of dollars from innocent victims who trusted him to serve as their lawyer and provide wise counsel. He betrayed them and served his own greedy impulses instead. My Office will continue to aggressively pursue securities and other financial frauds, particularly when perpetrated by lawyers and other industry professionals who are supposed to protect the rule of law, not defile it.”
“Todd Lahr’s clients felt comfortable investing with their trusted lawyer, expecting he would act in good faith,” said Michael J. Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “In reality, Lahr was inventing these great business opportunities, investing client funds only in himself and his teetering Ponzi scheme. The FBI is gratified to help bring to justice the perpetrator of such blatant and damaging fraud.”
The case was investigated by the Federal Bureau of Investigation, and is being prosecuted by Assistant United States Attorney Michael J. Rinaldi and Trial Attorney Philip B. Trout of the U.S. Department of Justice, Criminal Division, Fraud Section. The U.S. Attorney’s Office appreciates the substantial assistance of the U.S. Securities and Exchange Commission in this matter.