Two Cedarhurst residents were sentenced to lengthy prison terms last week for operating a Ponzi scheme out of their Valley Stream office, the FBI announced Tuesday.
Andrew S. Mackey, 62, and his common-law wife, Inger L. Jensen, 54, both of Cedarhurst, were convicted of 15 counts of wire fraud, mail fraud and conspiracy on May 16 after an eight-day trial. Mackey was sentenced to 27 years in federal prison and ordered to pay a restitution of $6,650,067, followed by three years of supervised release, while Jensen was sentenced to 14 years.
“Although we have prosecuted many multi-million-dollar Ponzi schemes in recent years, defendant Mackey’s sentence is the longest imposed in this district for a case of this type,” said United States Attorney Sally Quillian Yates. “These con artists cheated more than 150 investors out of more than $12 million by promising to invest the money in high-yield investment programs. We hope that the sentences imposed in this case will serve as a warning to anyone who is considering defrauding investors in this district.”
Evidence presented at the trial showed that from 2003 through 2007, Mackey and Jensen owned and operated ASM Financial Funding Corporation in Valley Stream. According to an FBI release, they falsely represented to their investors:
- “that they would use their sources to place investors’ money in private and confidential offshore business deals designed to promote the financial stability of select qualified individuals;
- “that investors would earn up to 20 percent interest per month;
- “that investors could choose to reinvest their earnings or receive monthly interest payments from ASM;
- “and that investors’ earnings would be based on ‘trade proceeds.’”
The pair paid commissions to brokers — who believed their promises — to recruit new investors.
Mackey and Jensen invested less than one-third of the money they took from the investors, and they never generated any profits whatsoever with the investors’ money, the release says. The entire amount that they invested on behalf of the investors was lost.
The other two-thirds of the investors’ money was used by the pair to “operate their fraudulent scheme, to pay their own personal expenses and to pay make-believe profits to some of the early investors to give ASM an air of legitimacy.”
Mackey and Jensen led the investors to believe that their firm was earning profits by distributing phony monthly statements and 1099-INT forms, which showed that the investors had earned interest income, and that their investments were safe and secure, according to the release.
ASM stopped paying make-believe profits to the investors in February 2006 and then tried to lull the investors into a false sense of security to delay or prevent their complaints to law enforcement. They promised that additional payments would be forthcoming and told the investors that talking to law enforcement would make it less likely that any of the investors would receive additional payments.
Witnesses at the trial included several Intermediaries and numerous investors who were victimized by the scheme.
“The lengthy sentences seen in this case reflect the damage done to the victim investors by these two defendants,” said FBI Special Agent in Charge Mark F. Giuliano of the Atlanta Field Office. “While the FBI is prepared to dedicate substantial investigative resources to address these fraudulent Ponzi investment schemes, we also take every opportunity to educate the public in avoiding such investment scams in the first place. Anyone with information or concerns regarding such matters should contact their nearest FBI Field Office.”