Investment manager pleads guilty in a $9 million fraud
A 65-year-old Massachusetts investment manager pleaded guilty yesterday to securities fraud for running a Ponzi scheme that cost 70 investors, many from the Bay State, about $9 million.
Michael C. Regan, 65, faces up to 20 years in jail and $5 million in penalties after settling the criminal charges with federal officials in New York. He also settled similar civil charges with the Securities and Exchange Commission, in which he agreed to repay more than $8.7 million.
Officials have not yet determined whether Regan has money or other assets to repay his victims.
And he could face additional fines, SEC spokesman David Rosenfeld said. “We’ll try to find whatever can be recovered in order to [get it] to the investors,’’ he said.
Formerly of Wayland, Regan now lives in Quincy. He was released on bail, with a date for sentencing yet to be set, said a spokesman for the US attorney’s office in Brooklyn.
Like convicted swindler Bernard L. Madoff, Regan promised investors consistently high returns. He told them his River Stream Fund had earned about 20 percent a year since 2001, using a trading strategy based on short-term market trends, authorities said. In fact, River Stream lost money or had minimal returns most of the time, paid as much as $9 million in bogus profits, and returned capital to investors with money given to him by other investors, according to court documents. Meanwhile, Regan took more than $2.5 million in fees for himself.
Before his fund collapsed in April 2008, Regan claimed it held about $18 million, when in reality it had only $101,600, according to prosecutors.
Regan’s lawyer, Raymond Mansolillo, did not return calls seeking comment.
Sean Sposito can be reached at ssposito@globe.com. 
