A financial adviser from Franklin Square was sentenced in Central Islip federal court Wednesday to a 55-month prison term for a Ponzi scheme that defrauded several clients out of nearly $1.9 million, the Justice Department said.
Paul Sullivan, 50, also faces 3 years of supervised release, according to the sentence by U.S. District Judge Leonard D. Wexler in Central Islip. Wexler ordered Sullivan to pay back the $1.9 million in restitution to his victims, according to a statement from the office of acting U.S. Attorney Kelly T. Currie of the Eastern District of New York. He pleaded guilty to wire fraud in November 2013.
Sullivan made investments without his clients' consent that resulted in huge losses, the Justice Department said. Sullivan admitted his wrongdoing to some of his clients after they found out, officials said, and then tried to keep them from going to law enforcement by promising to get their money back. In order to do that, Sullivan stole funds from other clients, officials said.Feds: LIer ran Ponzi schemeDataLI crime stats
Sullivan then lied, telling the clients from whom he stole that he was investing their money in special private investments with high rates of return. When one of his clients confronted him and recorded the interaction with a hidden camera, Sullivan admitted that he had used their funds to repay another client's investment losses, prosecutors said.
"What I did was completely illegal, completely wrong. . . . Everything I've done was wrong, was illegal, I have nothing to say," Sullivan told the client on the recording, prosecutors said.
Attempts to reach Sullivan's family were not successful.