Monmouth County, New Jersey, Man Sentenced To 79 Months In Prison For Operating $20 Million Ponzi Scheme
Sentence to be Served Consecutively to 41-Month Sentence for Florida Bank Robbery
TRENTON, N.J. – A Colts Neck, New Jersey, man who defrauded dozens of investors was sentenced today to 79 months in prison for operating a $20 million Ponzi scheme out of his Fair Haven, New Jersey office and Miami residence, U.S. Attorney Paul J. Fishman announced.
Louis J. Spina, 58, previously pleaded guilty before U.S. District Judge Anne E. Thompson to an information charging him with one count of wire fraud. Judge Thompson imposed the sentence today in Trenton federal court.
In August 2014, Spina pleaded guilty to robbing a bank in Coral Gables, Florida, in May 2014, while on pre-trial release on the New Jersey fraud charge. On Oct. 22, 2014, he was sentenced to 41 months in prison for that offense. His New Jersey sentence will be served consecutively.
According to documents filed in this case and statements made in court:
Between August 2010 and November 2013, Spina collected $20 million from 42 investors and deposited the funds into the LJS bank account. Spina admitted he solicited victims to invest through his business, LJS Trading LLC. After receiving the funds, Spina provided each investor with a note specifying a guaranteed monthly rate of return, typically ranging from nine to 14 percent.
Over the course of the scheme, Spina only transferred $9.5 million of the investor funds into a trading account. He used the remaining $10.5 million to pay the investors’ monthly interest payments, return portions of some investors’ principals, and to pay for his own personal expenses, including car purchases, luxury apartment rental payments, and a $400,000 donation to a private university.
Spina admitted he lied to investors about the status of their funds, telling them they were making large gains despite the fact he lost all of the $9.5 million that was actually invested. When certain investors became suspicious, he reassured them by sending misleading screen shots of their account balances that reflected only temporary gains, not the total daily losses. In addition, Spina was able to defraud his investors out of an additional $1.7 million by fabricating a story about a wealthy individual planning to buy LJS, which he told them would result in a 14 to 30 percent return on their investment. Altogether, Spina’s scheme cost investors a total of $12.7 million.
In addition to the prison term, Judge Thompson sentenced Spina to three years of supervised release, ordered him to forfeit $818,000 in seized assets and ordered him to pay $12.7 million in restitution to the victims.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel in Newark, New Jersey; and the U.S. Secret Service, under the direction of Special Agent in Charge Carl Agnelli in Newark, with investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Sarah M. Wolfe of the U.S. Attorney’s Office Criminal Division in Trenton.
Defense counsel: Brian P. Reilly Esq., Assistant Federal Public Defender, Trenton