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New Jersey man enters guilty plea in Facebook scam

New Jersey man enters guilty plea in Facebook scam

A man previously convicted in a Ponzi scheme pleaded guilty to charges concerning investment fraud on Sept. 4. The scam was focused around claims of having an inside track on Facebook's shares before the initial public offering in 2012.

The man was already serving a 22-year sentence connected to his involvement in a previous investment fraud case. The latest case involved a plan to get at least $8 million out of investors. As a result, he is facing an additional 30-year prison term. The accused was a former used car salesman. He, along with two others, also convinced investors to bankroll several fraudulent Florida real estate deals. The money was actually used both to pay the accused's high legal bills and "lulling" payments to the investors. The money that investors spent was never used to purchase Facebook shares.

The man accused in the scheme pleaded guilty to charges that included money laundering and wire fraud. He is scheduled for a sentencing hearing on Dec. 15. The investors were lured with the promise of having buyers available who would pay only top prices. When the scam took place, the investors were lead to believe that they were purchasing blocks of Facebook shares that would be hard to get otherwise.

A federal crime often carries a lengthy prison sentence as well as heavy fines. Sentencing guidelines and procedures at the federal level may differ drastically from procedures and sentencing at the state level. Charges that involve fraud or participation in a Ponzi scheme may seem hard for an accused person to fight. Contacting an attorney is a good idea for anyone who is concerned about their ability to defend themselves against such charges.

Source: NJ.com, "Ponzi schemer admits role in multimillion $$ Facebook scam", Thomas Zambito, September 04, 2014

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