A Katonah accountant pleaded guilty Friday in connection with what federal authorities said was a $2 million fraud that ripped off investors in a purported Tennessee gas pipeline company. Federal prosecutors said Laurence Brown, 64, used money from the two-year scheme for himself and relatives.
Investigators said when Brown was charged last year that more than $100,000 of his ill-gotten gains went to fund his daughter's amateur equestrian hobby.
Part of the fraud was a Ponzi scheme, federal prosecutors said, with Brown using $136,550 of investor funds to make payments to other investors.
"Laurence Brown used his position as an accountant to dupe his clients and other investors into believing they were making sound investments," U.S. attorney Preet Bharara said. "He took advantage of their trust for his own personal enrichment and now he will pay for his crimes."
Brown faces up to 70 years in prison by statute when he is sentenced by U.S. District Judge Miriam G. Cedarbaum in Manhattan. But federal sentencing guidelines will likely call for a much lesser sentence. He also faces fines and restitution of up to $5 million.
Brown and his business partner Ronald Mangini, 62, of Mount Kisco, were sued by the U.S. Securities and Exchange Commission at the same time criminal complaints were lodged by federal prosecutors in July 2010. The SEC suit also named family members of both men as beneficiaries of the fraud. That case is still pending.
Prosecutors said Brown induced more than 10 people to invest in Infinity Reserves-Tennessee Inc., a gas pipeline company whose only asset had been inactive for a decade. He falsely told investors he was the president of the company and the money would be used for upgrades, investigators said.
Source: http://www.lohud.com/article/20110910/NEWS02/109100326
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