PHILADELPHIA (AP) — A suburban Philadelphia man with five prior white-collar convictions pleaded guilty Monday to running a $17 million real-estate Ponzi scheme.
Robert Stinson Jr., 55, of Berwyn, promised 16 percent returns at his company, Life’s Good Inc., but instead wiped out the retirement savings of many small investors, prosecutors said.
Defense lawyers said he used the money to make payroll and to try to keep his business afloat as the real-estate market tanked, but they conceded that he also invested in side ventures without his clients’ knowledge, thereby committing fraud.
“It was not a Bernie Madoff situation,” public defender Felicia Sarner told The Associated Press. “It’s not as black and white as the government purports it to be. This is a man who put millions of dollars back into the business.”
But federal prosecutors said Stinson used other people’s money to rent a mansion, take lavish vacations and buy a pair of $66,000 Mercedes just before his November arrest.
They say he also showered family and friends with gifts. A federal receiver has sued to recover nearly $95,000 he allegedly gave his parents, Alice and Robert Sr., of Newberry, S.C., and his father’s church, Shiloh Outreach Church of the Apostolic Faith in Newberry.
“What makes this particularly harmful is he went after people who were investing their retirement. A number of people lost their entire retirement funds,” said Assistant U.S. Attorney David Axelrod. Some victims had self-directed Individual Retirement Accounts, he said.
The indictment said Stinson lured about 260 investors through a cold-calling operation and brochures that failed to note his two bankruptcies; five prior convictions in Delaware, New Jersey and Pennsylvania; and a Securities and Exchange Commission ban. The state and federal convictions for various fraud schemes date back to 1986, Axelrod said.
Stinson also claimed, falsely, to have degrees from the Massachusetts Institute of Technology and Penn State, authorities said.
Stinson, who remains in custody, faces about 30 years in prison on money laundering, fraud and other charges, Axelrod said.
(Copyright 2011 by The Associated Press. All Rights Reserved.)