Wilton man sentenced to prison in Ponzi case
Wilton resident Steven Simmons was sentenced April 3 in Manhattan federal court to 37 months in prison for his involvement in a Ponzi scheme.
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that U.S. District Judge Kimba M. Wood sentenced Simmons, 49. Between 2013 and January 2017, Simmons solicited more than $6 million in investments for a hedge fund and then misappropriated nearly $2 million of these funds for his own use and that of a co-conspirator.
“As Simmons well knew, other investor funds solicited by Simmons were used by the owner of the hedge fund in a Ponzi-like scheme to make payments to prior hedge fund investors,” Berman said in a statement. Simmons pled guilty before U.S. Magistrate Judge Barbara C. Moses on Oct. 30, 2017.
“Steven Simmons lied to investors about how their money would be used and what returns they could expect,” Berman said. “He used investor funds for his own personal use — including the purchase of a house — and provided other investor funds for use in paying back earlier investors. Now Simmons has been sentenced to more than three years in prison for his crimes.”
Among other false and misleading statements, Berman said Simmons told one investor, a single mother of three children whose source of funds was an alimony payment received in a recent divorce, that her capital would be invested with the hedge fund in securities, her principal investment would be preserved and not commingled with other investor funds, and that she would receive a return of at least 15% on the investment. Contrary to these representations, Simmons stole much of her investment, using $700,000 of that money within two months to buy a house in Wilton and wiring $700,000 to the personal account of a co-conspirator.
Berman said Simmons told another investor, a family investment office, that its funds would be placed by the hedge fund with a highly successful group of portfolio managers. Simmons actually solicited those investment funds to repay an earlier investor in the hedge fund who had demanded the return of its investment. As part of the fraudulent scheme, Simmons also created and provided investors with false monthly statements, Berman said.
In addition to his prison sentence, Simmons was sentenced to three years of supervised release, ordered to forfeit $6,900,000, representing the amount of proceeds obtained as a result of the conspiracy, including the forfeiture of property he bought in Wilton, and ordered to pay restitution to the victims of the offense.
Berman praised the investigative work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance in the investigation.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Elisha J. Kobre and Brendan F. Quigley are in charge of the prosecution.