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TRENTON
– Attorney General Anne Milgram and
Criminal Justice Director Deborah Gramiccioni
announced that an Ocean County man pleaded
guilty to theft late yesterday and was immediately
sentenced to state prison for stealing from
victims who invested in his fraudulent company.
According
to Director Gramiccioni, Brian D. Winters,
36, of Bayville, pleaded guilty to second-degree
theft by deception before Superior Court
Judge Wendel E. Daniels in Ocean County.
The judge immediately sentenced Winters
to seven years in state prison. The charge
was contained in a state grand jury indictment
obtained by the Division of Criminal Justice
on Feb. 15 as a result of an investigation
by the New Jersey Bureau of Securities.
Deputy Attorney General Patrick Flor handled
the plea and sentencing.
Judge
Daniels ordered that the seven-year state
prison term be served concurrently with
a federal prison sentence for tax evasion
that also was imposed yesterday. Winters
was turned over to the federal corrections
system.
U.S.
District Court Chief Judge Garrett E. Brown
Jr. yesterday sentenced Winters to 46 months
in federal prison for failing to pay more
than $900,000 in federal income taxes to
the IRS for tax years 2002 and 2003 related
to money he obtained from his fraudulent
investment scheme. Winters pleaded guilty
to the federal charge on April 1. Assistant
U.S. Attorneys John J. Hoffman and Patrick
C. Askin were assigned to the federal case
for U.S. Attorney Christopher J. Christie.
“Brian
Winters stole millions of dollars entrusted
to him by people looking to invest for retirement
and their children’s education,”
said Attorney General Milgram. “He
told investors they could live the life
of luxury like he was doing, but he didn’t
tell them he was bankrolling his lifestyle
with their money.”
An
investigation by the New Jersey Bureau of
Securities determined that from August 2002
to September 2003, Winters solicited more
than $4 million in investments from over
350 individuals by claiming to be a licensed
stock broker selling securities issued by
his company, Global Trading Investments
LLC. Winters promised investors a guaranteed
50 percent return on their investments and
issued monthly statements to individual
investors. In reality, Winters was not licensed,
the securities were fake, and he spent the
investors’ money on personal expenses,
including more than $1 million in cash withdrawals
and another $1 million used to pay back
prior investors.
Supervising
Investigator Rudolph Bassman and Chief of
Enforcement Richard Barry handled the investigation
for the Bureau of Securities, and Detective
Eric Ludwick handled the investigation for
the Division of Criminal Justice Major Crimes
Bureau.
In
May 2004, the Bureau of Securities filed
a civil complaint against Winters, Global
and Wyndam Group LP – a purported
successor company for which investors were
also solicited – for violations of
the New Jersey Uniform Securities Law as
well as the New Jersey Racketeer Influenced
and Corrupt Organizations (RICO) statute.
In
November 2006, the Bureau of Securities
obtained a judgment against Winters, Global,
Wyndam, Winters’ wife and other defendants,
including partners and employees of Winters.
Superior Court Judge Kenneth S. Levy ordered
that Winters and Global pay $4,152,973 in
restitution to investors, and that Winters
and Wyndam pay $1,497,465 in restitution.
The judge also ordered that Winters and
Global pay a civil monetary penalty of $3,514,000,
and that Winters and Wyndam pay a penalty
of $1,482,000. Deputy Attorney General Isabella
Trifilio Stempler handled the civil case.
Winters, his wife and the companies have
filed for bankruptcy, but the U.S. Bankruptcy
Court has issued an order denying discharge
of those judgments, meaning the defendants
will remain responsible for the restitution
and penalties.
Winters
also agreed as part of his federal plea
to pay restitution to the victims who invested
in Global Trading Investments and Wyndam
Group.
Winters
claimed to offer investors in Global a choice
of three funds with progressively higher
risks and returns - the Silver Fund, the
Gold Fund and the Platinum Fund. The Silver,
Gold and Platinum Funds did not exist, and
all of the investor funds were, in fact,
deposited initially in a single bank account.
The funds were transferred from that account
to other accounts for Winters' use and benefit.
The
Bureau of Securities investigation determined
that Winters used investor funds for, among
other things, $975,000 in personal investments;
installation of a swimming pool and landscaping
at his home for nearly $40,000; and purchases
of a $78,000 Land Rover, a Corvette and
two BMWs. He used investor funds to buy
three employees new BMWs and to pay a fourth
$40,000 in lieu of a BMW as rewards for
soliciting the most investor funds.
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