New York Entrepreneur Sentenced To 41 Months In Prison For Defrauding Investors Out Of More Than $3 Million
NEWARK, N.J. - A New York man was sentenced today to 41 months in prison for a two-year scheme in which he defrauded multiple victims who believed they were investing in businesses that offered a popular fitness training program, Acting U.S. Attorney William E. Fitzpatrick announced.
Joshua Bryce Newman, 37, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of wire fraud. Judge Walls imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Newman was a self-styled entrepreneur who engaged in a variety of business ventures, including venture capital work, a film production company, and, more recently, in businesses offering a popular fitness training program. By 2011 and 2012, Newman found himself with mounting legal and financial troubles largely as a result of judgments and liens filed against him and his film production company, Cyan Pictures, relating to their failed film project that was meant to produce and distribute a film about the New York Yankees entitled “Keeper of the Pinstripes.”
From 2012, Newman made material misrepresentations to solicit investments and loans purportedly for various fitness business ventures he was working on, when his true intent was to use the money for his own purposes, including repaying others who had invested in one of his prior projects.
Newman often supplied his victims with doctored or bogus documentation in order to obtain the investment capital and loans. He then lulled his victims into believing that their investment money was safe or that he was in a position to repay their loans by making further misrepresentations and supplying them with additional phony documents. The false documents he used included doctored operating agreements, false statements of ownership percentages held by various individuals, and bogus documents purporting to show the amount of annual partnership gains or losses reported to the IRS.
Newman also misrepresented to his potential partners, purported investors, and lenders in one of his business ventures that he had raised millions of dollars in funding for the project, when he knew that no such funds had been raised.
When investors raised concerns about their investments, Newman typically gave them false assurances and agreed to return the funds. In reality, he often had no funds to return, and so he would make various excuses, including that he had sent wires that had been delayed in the banking system when no such wire had been sent. He often stalled for time by giving his victims checks drawn on accounts with insufficient funds to cover the amount of the checks.
On at least one occasion, Newman sent a picture of the purported wire transfer order for $165,000 to an investor who had threatened legal action and told the investor that the funds were on the way, even though Newman knew that no such funds had been or would be furnished to the investor. Newman defrauded approximately 30 victims of approximately $3 million.
In addition to the prison term, Judge Walls sentenced Newman to three years of supervised release and ordered him to pay restitution of $3,118,165.82.
Acting U.S. Attorney Fitzpatrick credited special agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark, for the investigation leading to today’s sentencing.
The government is represented by Assistant U.S. Attorney Paul A. Murphy, Chief of the U.S. Attorney’s Office’s Economic Crimes Unit.
Defense counsel: Priya Chaudhry Esq., New York; Eric Kanefsky Esq., Newark