A co-owner of the Panoramic View Resort & Residences pleaded guilty Monday to lying to auditors investigating what officials called one of Long Island's largest Ponzi schemes, a $96 million fraud that kept the Montauk property afloat.
Adam Manson, 42, an Old Westbury real estate developer, will be sentenced to up to five years in prison as part of a plea deal before federal Magistrate A. Kathleen Tomlinson.
Manson pleaded guilty to one count of conspiracy to commit securities fraud at federal court in Central Islip. As part of the plea agreement, Manson agreed to forfeit all the unsold units at the resort, which officials said are valued at more than $60 million and also forfeit $3.9 million in criminal proceeds.
Manson and his brother-in-law, investment adviser Brian Callahan, 44, also of Old Westbury, siphoned money from investors to keep the resort afloat, prosecutors said.
In the plea agreement, Manson admitted lying to auditors who were checking the authenticity of Callahan's funds, prosecutors said.
Callahan last month pleaded guilty to securities and wire fraud and faces up to 24 years and three months in prison under the terms of a plea agreement. He also agreed to forfeit $67.4 million and make restitution to 40 victims of the fraud.
Manson's Manhattan attorney, Robert Anello, said his client is putting the case behind him.
"He's as committed as he has been . . . to ensuring the success and smooth operation of the Panoramic properties," Anello said.
Eastern District U.S. Attorney Loretta Lynch called the scheme "one of the largest investment frauds in Long Island history" after Callahan's plea was announced last month.
"Through lies and deceit . . . [Callahan] misled investors and stole investor funds . . . to support a lavish lifestyle and operate a multimillion-dollar Ponzi scheme," Lynch said in April.
According to officials, Callahan diverted $96 million from various investments funds that he operated. Manson, according to officials, helped his brother-in-law, Callahan, in lying to the accountants auditing his brother-in-law's funds by giving them phony promissory notes that inflated the value of the funds, and also by lying about the actual debts owned by the resort.