Roslyn $45M Ponzi scammer gets 9 years

Edward Stein, the Roslyn-based investment adviser who pleaded guilty last year to running a Ponzi scheme that ripped off $45 million from friends and investors, was sentenced to a prison term of 9 years in federal court in Brooklyn Tuesday.

The sentence by U.S. District Judge Jack B. Weinstein was lower than the 15- to 19-year term called for in federal sentencing guidelines, and came with no explanation just moments after Weinstein had described Stein as a calculating betrayer.

It drew surprised gasps from dozens of Long Island, New York City and out-of-state investors packing the courtroom. "I think it was incredibly unfair," said Carolyn Gilson of Florida, whose $10-million loss made her the single largest loser in Stein's scam. "I feel all the victims have been victimized all over again."

Stein, 60, grew up in Babylon and spent most of his life in Setauket before moving to Manhattan. He started as a life insurance salesman and became a trusted financial adviser to many families, branching out to run various investment funds, court papers showed.

During the 1990s he began diverting clients' money to bail out a bad investment in a fashion magazine called Detour and then began using new investments to cover up losses and pay off old investors. He also used $1 million in investor money to finance a Manhattan apartment for himself.

"Somewhere in the last 10 years I lost my sense of reality with this, and everyone has suffered," Stein said in an emotional apology.

Stein's lawyer portrayed him as a man whose crimes grew out of a desire to make things right with investors, but victims called him a callous and calculating "vulture" in letters and statements to Weinstein.

"We let him into every aspect of our lives thinking he was a decent man, and he betrayed us," said Ann Kahn of Northport.

"He has turned out to be a money-hungry evil sly fox who preyed on seniors like us," said Adele Reshotnia of Connecticut, formerly of Islip. "He left us penniless."

Although no supporters of Stein spoke, his family filled a row at the front of the courtroom, and his lawyer presented more than 40 letters of support from family and friends - including a few victims.

"The tragedy here is that he is basically a good man whose overreaching and lack of reality brought his downfall," wrote Harvey Wiener of Massapequa, an educator who said he lost $1.5 million.

Weinstein appeared to agree with the critics until he handed down the sentence. While noting Stein's age would "incapacitate" him, he also said Stein had "looked into the eyes of people whose friendship he had solicited and . . . stripped them of all their assets and in some cases all of their dreams."

"I think it was shocking," said Cathy Weiss, whose brother invested an inheritance from her father. "The judge realized what a vile person he was. How could he go under the guidelines?"