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TRENTON
- Attorney General Anne Milgram and Criminal
Justice Director Gregory A. Paw announced
that a Pennsylvania man was sentenced to
prison today for stealing approximately
$790,000 from clients of his investment
firm, which offered specialized financial
services for podiatrists. The firm had a
mailing address in Red Bank, N.J.
According
to Director Paw, Jeffrey Scott Lafferty,
40, of Green Lane, Pa., was sentenced to
10 years in state prison by Superior Court
Judge Harry G. Carroll in Bergen County.
He was ordered to pay $790,813 in restitution
to his victims. He also was required to
surrender his insurance producer license
from the State of New Jersey.
Lafferty
pleaded guilty on March 31 to second-degree
charges of securities fraud and misapplication
of entrusted property. Those charges were
contained in a Sept. 26 state grand jury
indictment naming him and his partner, Vincella
L. Ross, 39, who lives with him and was
co-owner of Lafferty & Partners LLC.
Ross continues to face first-degree charges
of conspiracy and money laundering, and
second-degree charges of securities fraud,
theft by deception and misapplication of
entrusted property.
The
charges resulted from a joint investigation
by the New Jersey Bureau of Securities,
New Jersey Division of Criminal Justice,
FBI, U.S. Department of Labor and U.S. Postal
Inspection Service.
Lafferty
and Ross were managing partners and owners
of Lafferty & Partners LLC, which specialized
in private wealth management for podiatrists.
Lafferty admitted that between Sept. 1,
2002 and July 26, 2007, he and Ross stole
approximately $790,000 from clients, including
a Bergen County podiatrist, his wife, his
office manager and other investors across
the U.S. Rather than investing the funds
for the clients as promised, Lafferty admitted
that he and Ross spent the money to purchase
their home in Pennsylvania and cover personal
expenses, including mortgage payments, airline
tickets, hotel rooms, store purchases and
ATM withdrawals.
The
clients received monthly statements from
Lafferty & Partners that falsely represented
that their money was invested. Lafferty
issued fraudulent “dividend checks”
to some of the out-of-state investors to
reinforce the appearance that their money
had been properly invested.
Ross
remains free on $250,000 bail. The indictment
is merely an accusation and she is presumed
innocent until proven guilty.
Each
of the first-degree charges carries a maximum
sentence of 20 years in prison. They also
carry criminal fines of up to $500,000 for
the money laundering charge and $200,000
for the conspiracy charge. By statute, prison
time for the money laundering charge would
run consecutive to prison time for the other
charges. The second-degree charges carry
a maximum sentence of 10 years in state
prison and a criminal fine of $150,000.
The
case is being prosecuted by Deputy Attorney
General Francine S. Ehrenberg of the Division
of Criminal Justice - Major Crimes Bureau,
who represented the state at the sentencing.
Investigator Pamela Fischer led the investigation
for the New Jersey Bureau of Securities.
Detective Cheryl Smith and Lt. John Jespersen
worked on the investigation for the Division
of Criminal Justice.
Attorney
General Milgram credited special agents
of the FBI’s Newark Division; special
agents from the U.S. Department of Labor,
Office of Inspector General; agents from
the U.S. Department of Labor, Employee Benefits
Security Administration; and inspectors
from the Newark Division of the U.S. Postal
Inspection Service. Attorney General Milgram
also thanked U.S. Attorney Christopher J.
Christie and his staff for their assistance.
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