LI woman indicted in $4.7M Ponzi scheme

An Oceanside businesswoman has been indicted by a federal grand jury on fraud charges for allegedly operating a Ponzi scheme that bilked victims out of $4.7 million.

Laurie Schneider, who operated several companies, including Janitorial Close-Out, told investors she could buy industrial machinery in China at low prices and then sell the items at steep markups in the United States, according to the indictment filed Friday by Eastern District Assistant United States Attorney Lara Treinis Gatz at federal court in Central Islip.

Treinis Gatz said that Schneider promised the unidentified victims a profit of 15 percent to 60 percent over nine to 18 months, the indictment states.

Schneider had no connections to Chinese companies and was instead running a Ponzi scheme in which any profits paid out to investors "were derived from those investors' own money and from money that was deposited into the Janitorial . . . account by subsequent China deal investors," Treinis Gatz wrote.

Three victims lost between $50,000 and $290,000, the indictment said. No total number of victims was given.

Schneider's lawyer, John Carman, of Garden City, said Monday: "The indictment of Laurie Schneider is simply another unfortunate chapter in the story of a woman who worked tirelessly on behalf of her failing business. The failure of a legitimate business does not always equate with criminality."

Treinis Gatz declined to comment.

Schneider is scheduled to be arraigned later this week at federal court in Central Islip on three counts of fraud. If convicted, she would face up to 20 years in prison and forfeit the $4.7 million.

Schneider was arrested by FBI agents in 2010 on an earlier charge alleging a Ponzi scheme that had bilked investors of $9 million.