PHILADELPHIA – United States Attorney William M. McSwain
announced that Todd H. Lahr, 60, of Nazareth, PA, pleaded guilty today to one
count of conspiracy to commit securities fraud and wire fraud, two counts of
securities fraud, and four counts of wire fraud. United States District Judge
Edward G. Smith presided over the guilty plea hearing in Easton via video
teleconference.
Lahr, an attorney licensed to practice law in Pennsylvania,
perpetrated a multiyear securities fraud scheme that targeted his own law
clients. The scheme involved the fraudulent sale of the securities of two
entities, THL Holdings, LLC and Ferran Global Holdings, Inc. Lahr raised funds
for the two companies by soliciting investments from his clients, telling them
that their money would be used for a variety of business opportunities which
were, in fact, non-existent.
Lahr initially sold THL Holdings investments, promising that
the money raised would be used to pursue specific business opportunities,
including mining operations in Papua New Guinea and the acquisition of the
shares of a penny stock. In reality, the money was used for Lahr’s personal
expenses and to make Ponzi scheme payments to prior investors, among other
things. Once Lahr realized that he was running out of investor money to pay the
THL Holdings investors, he sought investors for a second entity, Ferran. He
told the Ferran investors that their money would be used for business opportunities,
including even more mining in Papua New Guinea and residential property leases
in Spain and England—but, in fact, these funds were used to repay the prior THL
Holdings investors and for Lahr’s personal expenses to fund his lifestyle.
Among these personal expenses were his home mortgage, his child’s school
tuition, utility bills, and other personal debt. Total investor losses are
estimated to be over $2.7 million.
Even after he was caught, Lahr continued his deception by
lying in sworn testimony before the U.S. Securities and Exchange Commission
(SEC). In this testimony, Lahr denied writing checks to his personal accounts
from the THL Holdings accounts, when, in fact, he had written at least 25
separate checks to himself over a three-year period.
In addition to these criminal charges, the SEC filed a
parallel civil enforcement action in the Eastern District of Pennsylvania last
month based on the same course of conduct. The SEC Complaint charges Lahr and
another individual, Thomas Megas, with multiple securities fraud violations and
seeks disgorgement, prejudgment interest, civil money penalties, and
injunctions against future violations of the federal securities laws against
both defendants.
“Lahr targeted the very people to whom he owed a duty of loyalty:
his own law clients,” said U.S. Attorney McSwain. “He stole millions of dollars
from innocent victims who trusted him to serve as their lawyer and provide wise
counsel. He betrayed them and served his own greedy impulses instead. My Office
will continue to aggressively pursue securities and other financial frauds,
particularly when perpetrated by lawyers and other industry professionals who
are supposed to protect the rule of law, not defile it.”
“Todd Lahr’s clients felt comfortable investing with their
trusted lawyer, expecting he would act in good faith,” said Michael J.
Driscoll, Special Agent in Charge of the FBI’s Philadelphia Division. “In
reality, Lahr was inventing these great business opportunities, investing
client funds only in himself and his teetering Ponzi scheme. The FBI is
gratified to help bring to justice the perpetrator of such blatant and damaging
fraud.”
The case was investigated by the Federal Bureau of
Investigation, and is being prosecuted by Assistant United States Attorney Michael
J. Rinaldi and Trial Attorney Philip B. Trout of the U.S. Department of
Justice, Criminal Division, Fraud Section. The U.S. Attorney’s Office
appreciates the substantial assistance of the U.S. Securities and Exchange
Commission in this matter.
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