William Wells lost the money through high-risk investments and then replenished losing accounts with money from new
A former New Jersey man was sentenced to nearly four years in prison for running a $1.5 million Ponzi scheme, authorities said.
A former New Jersey man convicted of securities and wire fraud was sentenced to 46 months in prison Tuesday. William J. Wells, who lived in River Vale when he convinced about 30 friends, family and colleagues to allow him to invest their money, received a 46 month sentence, the U.S. Attorney's Office in New York's Southern District said in a news release Tuesday. He will also have to pay nearly $1 million in restitution to his victims for operating a scam from 2009 until his arrest in 2015.
Wells, now 43 and living in Valley Cottage, N.Y., pleaded guilty in March to securities and wire fraud. He was not a registered securities adviser, according to the Securities and Exchange Commission.
The former head of Promitor Capital, Wells promised clients big returns on their money but his high-risk investments proved "calamitous" and remarkably unsuccessful," U.S. Attorney Preet Bharara said in a statement.
Wells then produced fake account statements that grossly overestimated their performance in an effort to quell investors' concerns.
He also replenished losing accounts with money from new investors in "Ponzi-like fashion" Bharara said. Wells used some of the money he took for personal expenses such as credit card bills, car payments and private school tuition.
According to the SEC complaint, after one investor was unable to get Wells to return a portion of his investment, he confronted Wells by text:
"You running Ponzi scheme? Why the heck is this going down like this?"
Wells allegedly responded by text saying: "My explanation is that I'm an idiot and was trying to get some big trades to. ... make you more money."
Wells was first charged in October.
Jeff Goldman may be reached at jeff_goldman@njadvancemedia.com. Follow him on Twitter @JeffSGoldman. Find NJ.com on Facebook.