A Syosset man pleaded guilty Friday to defrauding investors of $30 million in a Ponzi scheme in which the victims were supposed to get extraordinary returns by financing the importation of ecologically friendly paving stones from Australia.
Eric Aronson, 46, founded and headed Permapave Industries and Permapave USA Corp. out of offices in Jericho and Syosset, which bilked 200 investors around the country between August 2006 and December 2010, officials said.
The investors were promised returns of as much as 400 percent for buying promissory notes that supposedly paid for the importation of the stones through which water could seep into the ground, Assistant U.S. Attorney William Campos has said.
The Aronson businesses falsely claimed that they already had a large backlog of orders from municipalities, Campos said.
Aronson, in reality, ran a Ponzi scheme in which earlier investors were paid off with money from later investors, and much of the money taken in went for personal expenses, including vacations, watches, jewelry and automobiles, officials said.
In pleading guilty to securities fraud at the federal court in Central Islip, Aronson told U.S. Magistrate Gary Brown, "I know what I was doing was wrong."
Loretta Lynch, U.S. attorney for the Eastern District of New York, said in a statement that Aronson "pretended to be a legitimate businessman, but he was no more than a common thief. Through his actions, the defendant caused the financial ruin of many, all the while enriching himself."
The government did not release the names of any victims.
Aronson faces between 121 and 151 months in prison when he is sentenced under the terms of a plea agreement.
The case was not Aronson's first brush with the law. He was sentenced to 40 months in prison in 2000 in another case of securities fraud.