Hedge Fund Manager Pleads Guilty to Operating Multi-Million Dollar Ponzi Scheme
BOSTON – A Boston-area hedge fund manager pleaded guilty today in federal court in Boston to running a multi-million dollar Ponzi scheme.
Raymond K. Montoya, 70, of Allston, pleaded guilty to three counts of wire fraud, five counts of mail fraud, and two counts of conducting an unlawful monetary transaction. U.S. Senior District Court Judge George A. O’Toole Jr. scheduled sentencing for Jan. 22, 2019. Montoya was charged by a criminal complaint and arrested in August 2017.
Between 2009 and June 2017, Montoya ran a pooled investment hedge fund in Boston called RMA Strategic Opportunity Fund, LLC. Montoya falsely told his investors—including his family, friends, and acquaintances who resided in Massachusetts, Ohio, and California—that the fund was earning substantial returns, when in fact, by 2014, the RMA Fund was sustaining substantial losses. The investors transferred millions of dollars of their personal savings and 401(k) retirement plans to Montoya and the RMA Fund. Montoya told the investors that he would invest their money in stocks and bonds, but he actually invested only a portion of their money, while diverting the rest—totaling millions of dollars—to business and personal bank accounts. Montoya used the diverted money for personal expenses such as luxury vehicles and the mortgage on his son’s residence.
Montoya was previously charged with securities fraud in a civil complaint by the Massachusetts Securities Division.
The charges of mail fraud and wire fraud provide for a sentence of no greater than 20 years in prison, three years of supervised release, a fine of $250,000 or twice the gross gain or gross loss from the offense, restitution and forfeiture. The charge of conducting unlawful monetary transactions provides for a sentence of no greater than 10 years in prison, three years of supervised release and a fine of $250,000, or twice the value of the criminally derived property. Sentences are imposed by a federal district court judge based on the U.S. Sentencing Guidelines and other statutory factors.
United States Attorney Andrew E. Lelling; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division; and Kristina O’Connell, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston, made the announcement today. The Massachusetts Securities Division provided valuable assistance. Assistant U.S. Attorney Neil J. Gallagher Jr. of Lelling’s Securities and Financial Fraud Unit is prosecuting the case.