PHILADELPHIA – United States Attorney William M. McSwain
announced that Lee D. Weiss, 51, of Newton, Massachusetts, was charged by
Information with six counts of wire fraud and two counts of mail fraud. The
charges stem from Weiss’s multi-year investment scam that targeted his own
clients and caused investor losses of more than $10 million.
The Information alleges that Weiss, the principal of Family
Endowment Partners, LP, an investment adviser registered with the U.S.
Securities and Exchange Commission, fleeced his own clients of millions of
dollars through purported investments in a now defunct Florida tobacco company
and a series of private securities offerings. Weiss allegedly told his clients
that their money would be used for investment purposes when, in fact, he
diverted it to make Ponzi payments and to fund his lifestyle. Weiss then told
his clients that they were making money when their funds had already been
misappropriated. As alleged, he continued to lie to them about the value of
their investments to prevent them from learning of his thefts and to convince
them to continue paying him fees for “managing” their money. Weiss allegedly
defrauded his investors of millions of dollars. He misspent his clients’
investment funds on himself, payments to prior investors, and to prop up his
other unrelated businesses.
“Honesty, integrity, and trust all play a critical role in
the relationship between a financial advisor and a client, and any advisor who
deliberately betrays their clients’ trust for their own financial gain turns
the system on its head,” said U.S. Attorney McSwain. “The damage done by such
corrupt financial advisors can be catastrophic. We will continue to hold those
who commit crimes like the ones alleged here accountable for their misdeeds.”
“Lee Weiss lived lavishly on his clients’ money, funds
they’d expected him to invest responsibly,” said Michael J. Driscoll, Special
Agent in Charge of the FBI's Philadelphia Division. “For years, he
misrepresented his actions, leading to millions and millions in losses as he
worked to keep his Ponzi scheme afloat. Simply stated, this case is about greed
and the serious abuse of trust. The FBI is determined to hold accountable
financial fraudsters like this, to find a measure of justice for their victims
and prevent anyone else from being fleeced.”
“The Postal Inspection has a long history investigating
investment frauds as the fraudsters often rely upon the mail to execute their
schemes,” said Inspector Wood. “The defendant, Lee Weiss, took advantage of
clients who trusted him to manage their wealth in what he promised were safe,
blue chip investment strategies. Through a web of corporate entities, Mr. Weiss
hid the reality of his investment strategy and took his client’s money to cover
his own losses. Thanks to hard work of our Inspectors, the agents of the FBI,
and prosecutors at the United States Attorney’s Office, Mr. Weiss is being held
accountable for his deceitful practices.”
If convicted, the defendant faces a maximum possible
sentence of 160 years’ imprisonment, a $2 million fine, 3 years’ supervised
release, an $800 special assessment, mandatory restitution, and forfeiture.
The case was investigated by the Federal Bureau of
Investigation and the U.S. Postal Inspection Service, and is being prosecuted
by Assistant United States Attorneys Paul Shapiro and Michael J. Rinaldi. The
U.S. Attorney’s Office appreciates the substantial assistance of the U.S.
Securities and Exchange Commission in this matter.
An Indictment, Information, or criminal complaint is an
accusation. A defendant is presumed innocent unless and until proven guilty.
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