A St. James man was sentenced yesterday to 6 years in prison for operating a $17.9 million Ponzi scheme that swindled 74 people over almost 10 years, officials said.
James Peister, 63, who ran an investment fund, was ordered by U.S. District Judge Joseph Bianco in Central Islip to forfeit $17.9 million in assets, including what officials called his "lavish" eight-bedroom estate. Restitution of $9.6 million will be paid to victims.
Peister, who pleaded guilty to one count of securities fraud in November, will be under supervision for three years after leaving prison.
Before Bianco imposed the sentence, Peister "accepted responsibility" for his actions, according to his attorney, Michael Postiglione of East Rockaway.
"He handed down a fair sentence," Postiglione said of the judge.
Kelly Currie, acting U.S. attorney for the Eastern District, said in a statement: "Peister lulled his victims into a false sense of security through empty promises of reliable growth and conservative investing. After stealing millions of dollars in inheritances and retirement saving, Peister now faces his own retirement in prison while his victims struggle to rebuild their lives."
In the scheme, which ran from January 2000 to June 2009, Peister promised investors in his Oceanside-based Northstar International Group that their money would be invested in a safe variety of securities.
Instead, officials said, Peister used much of the money to support his luxurious lifestyle and pay business expenses.
Peister inflated the value of his fund in financial statements to investors, in marketing materials and to auditors, officials said. At one point in 2007, according to the Securities and Exchange Commission, Peister claimed his Globex Fund had $14.5 million in assets when it really had only $6,000.
Peister's scheme collapsed along with the Wall Street collapse of 2008 when investors began demanding the return of their money, officials said.
With William Murphy