Philadelphia Woman Indicted in $68 Million Ponzi Scheme
The US Attorney’s office out of New Jersey recently announced the indictment of an investment fund manager who had allegedly orchestrated a $68 million securities fraud scheme. Fifty-nine year old Brenda Smith of Philadelphia, Pennsylvania was indicted on six counts of wire fraud and one count of securities fraud.
According to court documents, Smith managed Broad Reach Capital LP, supposedly a hedge fund that was open to accredited investors. The fund was founded in 2016. Within just three years, allegedly using misrepresentations and false promises, Ms. Smith persuaded numerous investors to part with their money so that she could use trading strategies which, she claimed, allowed her to optimally execute and capitalize on unique opportunities. She called the overall strategy VIX Convergence. Instead of actually investing the millions she was given, Smith allegedly diverted the money for personal use and to pay out millions of dollars to other investors. This is, of course, the classic structure of a Ponzi Scheme, where money from new investors is used to pay old investors. It works, if you don’t get caught, as long as you are always bringing in new investors. Just ask Bernie Madoff…
Philadelphia Ponzi Scheme Manager Faces Decades in Prison and Millions in Fines
As part of her scheme, Smith brought in more than $68 million in cash from approximately 40 investors.
Smith faces 20 years in prison and a $250,000 fine on each count of wire fraud, and 20 years and a $5 million fine for the securities fraud charge.
The charges and allegations in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
Pennsylvania & New Jersey Securities Fraud Attorneys
If you or someone you know has been the victim of investment fraud or a Ponzi Scheme, contact our attorneys immediately for a free consultation toll-free at 215 462 3330 or by using our online contact form.