Following a guilty plea in December to wire fraud for running a two-year $200 million Ponzi scheme based on false statements to investors about inflated returns for nonexistent wholesale jewelry deals, Long Island jewelry business owner Gregory Altieri was sentenced to 2.5 years in prison on Thursday, March 20.
As part of the plea agreement, Altieri admitted to engaging in securities fraud related to the scam. Altieri could spend up to 20 years behind bars as a result of the charges.
“Altieri is held accountable for duping dozens of investors, including retirees living off their pensions,” stated Seth D. DuCharme, Acting United States Attorney for the Eastern District of New York. “The defendant’s lies have caught up to him and he will now face the consequences of his fraudulent scheme.”
DuCharme thanked the Federal Bureau of Investigation’s New York Field Office for its outstanding work on the investigation, as well as the Securities and Exchange Commission’s New York Regional Office for their support.
Beginning in August 2017, Altieri sought $75 million to $85 million in investments in his company, LNA Associates, from over 80 investors in Queens, Staten Island, Long Island, and abroad. Altieri persuaded investors, including police officers and firefighters, that their money would be used to buy jewelry at “closeout” rates, which would then be resold for a high profit, producing returns of 30 to 70 percent in a matter of months.
While Altieri first acquired some jewels using investor funds, he has been using money from new investors to pay previous investors beginning about May 2018, implying to the latter group that they were earning returns on their investments. Altieri exploited these alleged “returns” to persuade earlier investors to maintain their money with LNA Associates by “rolling over” their cash into new investments, based on fraudulent assurances that the money would be used to buy more jewels.
By January 2020, when Altieri stopped paying investors, he owed them nearly $200 million based on the artificially inflated projected returns.