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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania

FOR IMMEDIATE RELEASE
Thursday, April 30, 2020

Massachusetts Man Charged With Orchestrating Ponzi Scheme, Defrauding Clients of More than $10 Million

PHILADELPHIA – United States Attorney William M. McSwain announced that Lee D. Weiss, 51, of Newton, Massachusetts, was charged by Information with six counts of wire fraud and two counts of mail fraud. The charges stem from Weiss’s multi-year investment scam that targeted his own clients and caused investor losses of more than $10 million.

The Information alleges that Weiss, the principal of Family Endowment Partners, LP, an investment adviser registered with the U.S. Securities and Exchange Commission, fleeced his own clients of millions of dollars through purported investments in a now defunct Florida tobacco company and a series of private securities offerings. Weiss allegedly told his clients that their money would be used for investment purposes when, in fact, he diverted it to make Ponzi payments and to fund his lifestyle. Weiss then told his clients that they were making money when their funds had already been misappropriated. As alleged, he continued to lie to them about the value of their investments to prevent them from learning of his thefts and to convince them to continue paying him fees for “managing” their money. Weiss allegedly defrauded his investors of millions of dollars. He misspent his clients’ investment funds on himself, payments to prior investors, and to prop up his other unrelated businesses.

“Honesty, integrity, and trust all play a critical role in the relationship between a financial advisor and a client, and any advisor who deliberately betrays their clients’ trust for their own financial gain turns the system on its head,” said U.S. Attorney McSwain. “The damage done by such corrupt financial advisors can be catastrophic. We will continue to hold those who commit crimes like the ones alleged here accountable for their misdeeds.”

“Lee Weiss lived lavishly on his clients’ money, funds they’d expected him to invest responsibly,” said Michael J. Driscoll, Special Agent in Charge of the FBI's Philadelphia Division. “For years, he misrepresented his actions, leading to millions and millions in losses as he worked to keep his Ponzi scheme afloat. Simply stated, this case is about greed and the serious abuse of trust. The FBI is determined to hold accountable financial fraudsters like this, to find a measure of justice for their victims and prevent anyone else from being fleeced.”

“The Postal Inspection has a long history investigating investment frauds as the fraudsters often rely upon the mail to execute their schemes,” said Inspector Wood. “The defendant, Lee Weiss, took advantage of clients who trusted him to manage their wealth in what he promised were safe, blue chip investment strategies. Through a web of corporate entities, Mr. Weiss hid the reality of his investment strategy and took his client’s money to cover his own losses. Thanks to hard work of our Inspectors, the agents of the FBI, and prosecutors at the United States Attorney’s Office, Mr. Weiss is being held accountable for his deceitful practices.”

If convicted, the defendant faces a maximum possible sentence of 160 years’ imprisonment, a $2 million fine, 3 years’ supervised release, an $800 special assessment, mandatory restitution, and forfeiture.

The case was investigated by the Federal Bureau of Investigation and the U.S. Postal Inspection Service, and is being prosecuted by Assistant United States Attorneys Paul Shapiro and Michael J. Rinaldi. The U.S. Attorney’s Office appreciates the substantial assistance of the U.S. Securities and Exchange Commission in this matter.

An Indictment, Information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.

Topic(s): 
Financial Fraud
Securities, Commodities, & Investment Fraud
Contact: 
MICHAEL CAVACINI Media Contact 215-861-8300
Updated April 30, 2020