Hudson Valley Man Pleads Guilty to Ponzi Scheme

A "remarkably unsuccessful" trader pleaded guilty to scamming $1.5 million from over 30 investors, many that were friends and family, over a six-year period.

In Manhattan federal court, 42-year-old William J. Wells of Valley Cottage plead guilty to securities and wire fraud.

“William Wells engaged in a fraudulent scheme where he lured investors through lies about his trading performance and spent their money lavishly on himself,” United States Attorney for the Southern District of New York Preet Bharara said in a statement. “Instead of operating a legitimate investment firm – as he said he would to his investors – Wells focused on covering up his consistent trading losses and his personal spending of investor money, going so far as to create entirely fake account statements to reassure his clients.”

According to the prosecution, over a six-year period Wells engaged in a fraudulent scheme where he lured investors by lying about his trading performance and spent the money on himself. In reality, Wells lost money every year, losing over a half-million dollars from September of 2009 until the time of his arrest.

As a result of his misrepresentations, Wells obtained over $1.5 million in investments from more than 30 investors, many that were friends, colleagues, or family members. He often used investor funds to pay his own credit card bills, automobile payments, and private school tuition. He also used investor funds to pay back other investors in a Ponzi-like scheme.

Wells will be sentenced at a later date. He faces a maximum of 20 years in prison for each guilty plea and a maxim fine of $5 million.