Ponzi scheme operator sentenced to 5 years, ordered to pay $13M, US Attorney’s Office says

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Ponzi scheme operator sentenced to 5 years, ordered to pay $13M, US Attorney's Office says

According to the US Attorney’s Office, Patrick O. Howard caused at least one investor to transfer all of his retirement assets to the fake fund.

DALLAS – A McKinney man who ran a Ponzi program was sentenced to five years in prison and $ 13 million refunded to his victims, according to acting U.S. Attorney for the Northern District of Texas, Prerak Shah sentenced.

Patrick O. Howard pleaded guilty to securities fraud in November 2020. U.S. District Judge Jane J. Boyle sentenced Howard on Thursday and was taken into custody immediately after the hearing, the U.S. Attorney’s Office said in a press release.

In pleading papers, Howard admitted running a Ponzi-type program that attracted more than 100 investors to purchase $ 13 million in membership units for $ 50,000 apiece, according to prosecutors.

Howard is the owner of Insured Liquidity Partners CGF I, Insured Liquidity Partners CGF II, and Capital Ventures, LLC.

His companies promised investors an annual return of 12% paid quarterly and “insured liquidity”.

The US prosecutor said Howard falsely portrayed himself as a registered investment advisor and promised investors that they would not lose money because of insurance that offsets poor performance. Howard persuaded an investor to hand over all of his retirement assets, according to prosecutors.

Rather than properly investing the money, US prosecutors announced that the companies were issuing fake bank statements and paying investors who chose to get their quarterly profits from the investments of later investors rather than the fund’s earnings.

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One of the two victims who testified when he was sentenced told the judge that she had lost her daughter’s college savings after investing with Howard.

A number of federal agencies are investigating the case, including the FBI’s Dallas Field Office, the US Postal Inspection Service, and the US Securities & Exchange Commission. It was being prosecuted by US assistant attorney Andrew Wirmani, the US prosecutor said.