New York Man Sentenced In Manhattan Federal Court To 61 Months In Prison For Fraudulent Investment Scheme
Preet Bharara, the United States Attorney for the Southern District of New York, announced that S. GEORGE MILTER was sentenced today in Manhattan federal court to 61 months in prison for participating in an investment scheme that defrauded foreign investors out of nearly $1 million. As part of the scheme, investors were lured with false promises that their funds would be safely invested in the U.S. financial markets through a legitimate broker-dealer. Instead, the money was misappropriated, used to pay certain expenses, and transferred to other entities and individuals, including MILTER and his family. MILTER pled guilty in November 2013 to one count of conspiracy to commit wire fraud and was sentenced by U.S. District Judge Katherine B. Forrest.
Manhattan United States Attorney Preet Bharara said: “Mr. Milter deliberately deceived investors, diverted their funds to members of his family and himself, and then lied when questions were asked. The sentence Judge Forrest imposed today ensures that Milter will spend substantial time behind bars paying for his fraud.”
According to the court filings and statements made in court:
MILTER held himself out as a President and Chief Executive Officer of Lempert Capital Management, Ltd., a corporation purportedly incorporated in the Cayman Islands, and Chief Executive Officer of Lempert Brothers, which was a registered broker-dealer. Starting in approximately 2005, foreign investors were lured into sending nearly $1 million to Lempert Capital’s purported management company Lempert Brothers under the pretense that those funds would be invested in the U.S. financial markets by Lempert Brothers To induce investors into wiring funds, among other false promises, MILTER told investors that the funds would be safeguarded, and that if the value of the funds dropped more than 20%, the money would be frozen and all remaining funds available for return to investors. In fact, the nearly $1 million of investor funds were misappropriated and diverted to, among other things, MILTER’s family and himself.
To keep the scheme going, MILTER sent fraudulent monthly account statements to the investors. These statements falsely reflected that the investors’ funds were invested and earning substantial income. When investors attempted to withdraw funds from their accounts, MILTER made additional false and fraudulent representations as to why the funds could not be returned when requested. For example, investors falsely were told that their money was illiquid because it had been invested in various companies that had not yet gone public.
In addition to the prison sentence of 61 months, Judge Forrest sentenced MILTER, 35, of New York, New York, to three years of supervised release and ordered him to pay a special assessment of $100. Judge Forrest also ordered restitution in the amount of $946,509, and forfeiture of the same amount, which amount represents the crime proceeds.
MILTER’s co-defendant Cliffe R. Bodden, 50, previously pled guilty and currently is serving his sentence of 74 months in prison.
Mr. Bharara praised the investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s Complex Frauds Unit. Assistant United States Attorney Carrie H. Cohen is in charge of the prosecution.