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Feds: Manhasset man's Ponzi scheme bilked investors

A former Wall Street securities trader from Manhasset who officials said touted wild success playing the market was arrested Friday and charged with running a Ponzi scheme that bilked investors out of $19 million — the bulk of which he spent on a lavish lifestyle instead of shrewd investments, prosecutors said.  

Paul A. Rinfret, 70, was scheduled to appear Friday afternoon before Magistrate Judge Robert W. Lehrburger in Manhattan federal court on securities fraud and wire fraud charges, according to Geoffrey S. Berman, U.S. attorney for the Southern District of New York. 

Rinfret's attorney, Jennifer Willis, could not be reached for comment.

“As alleged, Paul Rinfret deceived investors at every step,” Berman said in a news release. “He lied about his past returns to get them to invest. He lied about having invested all of their money, when he was actually spending much of it on things like jewelry, cars, and a Hamptons vacation home. He lied about how their money was growing. His alleged lies stop today.”

Prosecutors said Rinfret defrauded at least six investors from May 2016 through June 2019 by selling limited partnership interests in an entity called Plandome Partners LP, the firm through which he “purported to trade in futures contracts relating to the Standard & Poor’s 500 utilizing a bespoke algorithm he had developed.”

Specifically, Rinfret told potential and actual investors that he would use all of their investment funds to trade futures contracts tied to the Standard & Poor’s 500 index using the trading algorithm and take for himself a fee of 25 percent of the net profits on the trades, prosecutors said.

“Rinfret used most of the victims’ money to purchase luxury goods and high-end vacation rentals for himself and family members,” prosecutors said, adding that he used the Plandome Partners account to spend almost $50,000 on a luxury Hamptons vacation rental, $40,000 on jewelry, and tens of thousands of dollars on his son’s engagement party venue.

But he invested very little of the clients’ money, officials said, and the little he did invest did poorly.

Additionally, prosecutors said, Rinfret claimed that Plandome Partners traded through certain brokerage accounts, one of which simply didn't exist, and two of which were not open at a time when Rinfret claimed to be trading in them. 

“As alleged, Paul Rinfret willfully and continually defrauded his investors, the very people he was tasked with serving, in a multimillion-dollar Ponzi scheme that served to enrich only him,” said Angel M. Melendez, special agent-in-charge of the New York field office of Homeland Security Investigations.

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