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Milton man sentenced to 17 years in prison for Ponzi scheme

Posted by Dave Eisenstadter  April 26, 2013 03:11 PM

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A Milton man was sentenced to 17 years in federal prison for orchestrating a Ponzi scheme through his securities company and for defrauding customers of millions of dollars, according to a statement from US Attorney Carmen M. Ortiz.

Arnett L. Waters, 63, pleaded guilty to two counts of criminal contempt last Oct. 2, 2012., and on Nov. 29 pleaded guilty to seven counts of securities fraud, six counts of mail fraud, two counts of money laundering, and one count of obstruction of justice, according to the statement.

US District Judge Denise J. Casper sentenced Waters to the 17 years in prison, plus three years of supervised release and $9 million in restitution.

“The personal nature of this fraud, the effort and calculation necessary to carry it out, and the defendant’s utter disregard for his victims and the law, makes this one of the most serious white collar cases in Massachusetts in recent memory,” Ortiz said in the statement.

According to the statement, from 2007 to 2012, Waters obtained about $839,000 from various investors by selling units in sham investment partnerships, which he spent mostly on personal and business expenses.

Waters had told investors their investments had generated substantial profits and would be paid to them in the near future, the statement said.

Between 2002 and 2012, Waters defrauded coin customers and obtained millions of dollars by selling coins at inflated prices, as much as a 600 percent markup from their value, the statement said.

Waters persuaded one victim, who had paid him more than $7 million for coins, to further pay him more than $500,000 for fees related to the coins' sale and storage. Waters had already sold most or all of the coins and had used the proceeds for his personal and business expenses, according to the statement.

Waters also engaged in criminal contempt when he maintained a hidden bank account in violation of the asset freeze order in a civil fraud case brought against him by the Securities and Exchange Commission, the statement said.

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