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Date: 10-09-2019
Case Style:
United States of America v. Paul A. Rinfret
Case Number: 1:19-cr-00535-GHW
Judge: Gregory H. Wood
Court: United States District Court for the Southern District of New York (New York County)
Plaintiff's Attorney: Robert L. Boone
Defendant's Attorney:
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Description:
New York, NY - Former Wall Street Trader Pleads Guilty To Running A Ponzi Scheme
Paul A. Rinfret pled guilty to participating in a Ponzi scheme in which he obtained approximately $19 million in total from victims through a variety of lies and misrepresentations. RINFRET pled guilty to one count of wire fraud and one count of securities fraud before U.S. District Judge Gregory H. Woods.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Paul Rinfret callously lied to investors at every step. He lied about his past returns to get them to invest. He lied about having invested all of their money, when he was actually spending much of it on things like jewelry, cars, and a house in the Hamptons. To keep investors appeased, Rinfret lied about how their money was growing. Today, Rinfret has admitted to his scheme, through which he obtained approximately $19 million, and now faces a prison term for his lies.”
According to the allegations contained in the Complaint and the Indictment:
From at least 2016 through 2019, RINFRET engaged in a scheme to defraud potential and actual investors in an entity called Plandome Partners L.P. for his own personal gain and for the gain of his family members. RINFRET offered potential investors the ability to invest in Plandome Partners through the purchase of limited partnership interests. In soliciting investments, RINFRET falsely represented to potential and actual investors (the “Victims”) that he would use all of their investment funds to trade futures contracts tied to the Standard & Poor’s 500 index using a propriety trading algorithm he had developed, taking for himself a fee equivalent to 25% of the net profits on the trades.
Through his fraudulent scheme, RINFRET obtained approximately $19 million in total from approximately six Victims on the false claim that he would utilize their investment funds for trading. RINFRET’s lies and misrepresentations were varied and many. For example, RINFRET claimed that Plandome Partners traded through certain brokerage accounts, one of which simply did not exist, and two of which were not open at a time when RINFRET claimed to be trading in those accounts.
Further, RINFRET used only a small portion of the Victims’ invested funds to engage in actual trading. Instead, RINFRET used most of the Victims’ money to purchase luxury goods and high-end vacation rentals for himself and family members. For example, RINFRET used the Plandome Partners account to spend almost $50,000 on a luxury Hamptons vacation rental, more than $40,000 on jewelry, and tens of thousands of dollars on the event venue where his son held his engagement party.
When RINFRET did actually engage in trading with Victims’ funds, he generated losses. But, to prevent his Victims from seeking a return of their money, and to induce additional investments, RINFRET falsely reported excellent investment performance results to the Victims through false and fraudulent monthly account statements that RINFRET typically emailed to the Victims. RINFRET also sent fabricated brokerage account statements to the Victims.
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RINFRET, 70, of Manhasset, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of securities fraud, which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
RINFRET is scheduled to be sentenced by Judge Woods on February 10, 2020.
Mr. Berman praised the outstanding work of Homeland Security Investigations and also thanked the New York City Police Department, which assisted in the investigation.
The prosecution of this case is being overseen by the Office’s Securities and Commodities Fraud Task Force.
Outcome: 10/08/2019 Minute Entry for proceedings held before Judge Gregory H. Woods: Change of Plea Hearing as to Paul A. Rinfret held on 10/8/2019. Defendant Paul A. Rinfret present with appointed counsel, Jennifer E. Willis, Esq. of the Federal Defenders of New York, Inc. AUSA Robert Boone present. Court Reporter Khris Sellin present. Change of plea hearing held. The defendant withdrew his earlier pleas of not guilty and entered a plea of guilty to counts 1 and 2 of the indictment. PSI ordered. Sentencing is scheduled for February 10, 2020 at 4:00 p.m. Bail continued. (jbo) (Entered: 10/09/2019)
10/08/2019 Minute Entry for proceedings held before Judge Gregory H. Woods: Plea entered by Paul A. Rinfret (1) Guilty as to Count 1,2. (jbo) (Entered: 10/09/2019)
10/08/2019 Change of Not Guilty Plea to Guilty Plea as to Paul A. Rinfret (1) Count 1,2. (jbo) (Entered: 10/09/2019)
10/08/2019 Order of Referral to Probation for Presentence Investigation and Report as to Paul A. Rinfret. (Signed by Judge Gregory H. Woods on 10/8/19)(jbo) (Entered: 10/09/2019)
10/08/2019 Set/Reset Hearings as to Paul A. Rinfret: Sentencing set for 2/10/2020 at 04:00 PM before Judge Gregory H. Woods. (jbo) (Entered: 10/09/2019)
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Defendant's Experts:
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