nothin New Haven Independent | Branford “Ponzi Scheme” Financier Gets Eight…

Branford Ponzi Scheme” Financier Gets Eight Years, Four Months

UPDATE — Feisal Sharif, a former Branford financier turned Ponzi scheme artist, was sentenced to eight years and four months in prison today in U.S. District Court after admitting he defrauded scores of investors of about $3.68 million over a nine-year period. 

In a 26-page sentencing memorandum Senior Asst. U.S. Attorney Richard J. Schechter had asked the court to sentence Sharif to at least seven years in prison for violating the trust placed in him by the numerous victims of his Ponzi scheme.”

U.S. District Court Judge Stefan R. Underhill, who sits in Bridgeport, imposed the sentence this afternoon. The judge also ordered three years of supervised release after he finishes his prison sentence.

Sharif was ordered to report to prison on May 1. 
 
Prosecutors say that there were 76 victims, many of whom were relatives, friends and others Sharif knew through their mutual religious institution. They invested funds with his company, First Financial, LLC. over a period of years. Sharif, 43, lived in a condo at 49 Rose St., and was arrested there in 2012. His condo is located a few blocks from the town Green. Click here to read the story of his arrest.

At sentencing, the federal prosecutor will also seek a mandatory order of restitution naming each of the victims on the restitution chart. To date, Sharif has made no restitution payments of any kind. According to the plea agreement Sharif had agreed to waive his right to appeal any sentence that does not exceed 97 months. It was not immediately clear why the judge sentenced him to 100 months. Sharif has also agreed to restitution.

Last August Sharif waived indictment and pled guilty to two counts of fraud, one commodities fraud, the other wide fraud. He faced a maximum of 30 years in prison. Because of his cooperation, prosecutors are now seeking far less of a prison term. Click here to read the story.
 
A prison sentence of at least seven years is a reasonable and just sentence, and should be imposed in this matter,” Schechter wrote in his sentencing memorandum. Indeed, a prison sentence of at least seven years (84 months) will: (a) promote respect for the law; (b) serve as a fair and just punishment for Sharif’s multi-year Ponzi scheme in which more than 70 victims lost more than $3.6 million; and (c) send a clear and understandable message of general deterrence to prevent other investment advisors from defrauding victims who place their trust in the hands of seemingly legitimate and honest professionals.

Anything less than a prison sentence in the area of seven years would suggest that Sharif’s Ponzi scheme is not a very serious’ or monumental’ crime — words defendant’s experienced counsel has used to describe Sharif’s multi-year fraud scheme.” 

Sharif’s attorney Paul F. Thomas, a federal public defender, said in his sentencing memorandum that Sharif was an unlikely person to have committed a multimillion-dollar fraud, but he did.

Over the course of nearly a decade he committed a series of fraudulent acts that victimized numerous people who knew Sharif personally and trusted him based upon their familiarity with him. Their trust was misplaced. Collectively the many victims lost $3.6 million. Their loss is financial but it is also emotional and physical as some victims have detailed in their heartfelt letters to the Court. The victims are justifiably angry, feeling a profound sense of betrayal. Understandably, some are vengeful, seeking from the Court the longest sentence possible.”

A Crazy Criminal Quest”

In his sentencing memorandum, Thomas argued that Sharif’s motive was not personal financial gain but an effort to overcome his shame after he initially lost funds belonging to family and friends.

For all the deception he practiced on victims who trusted him, to a large extent Feisal Sharif is before the Court because of self-deception. Like some other persons who commit large-scale and long term frauds, personal financial gain was not his objective. Rather, and paradoxically, shame and misguided pride contributed significantly to his destructive scheme: he was ashamed of the initial loss of investments by family friends, he felt compelled to make good on that relatively small loss, he thought he could and would succeed, somehow and against all rational odds, and he lost his ethical bearings in his crazy criminal quest. As the scope of the losses and his own wrongs grew, he did the worst thing a person in a hole can do – he stubbornly and blindly just kept digging.”

In the pre-sentence report, which Thomas refers to, the government outlines in detail Faisal’s criminal conduct. Over the period of the Ponzi scheme Sharif took in about $6.1 million in investments. Like most Ponzi schemes, the idea was to pay early investors with funds from new investors. He also used the vast majority of the investment capital to pay other investors their purported returns on their investments, the attorneys said.

Meanwhile, Sharif defrauded numerous investors who believed their capital was being used as part of a commodity pool to profit from trading in commodity futures,” the sentencing memo says. The scheme fell apart when investors sought unsuccessfully to redeem their funds. Link.

Thomas wrote in his sentencing memo that the victims, deceived, betrayed and un-repaid with no realistic prospect of being made whole, are understandably angry. Sharif does not minimize his responsibility for this offense, which he alone committed and which only he could have prevented or stopped before it produced the harm that resulted. It should be recognized, however, that Sharif never intended to cause the losses that resulted, as obvious as they are in retrospect.

And, although Sharif derived personal benefit, that was not the objective, the offense was not driven by greed, and his benefit was a relatively small percentage of the funds solicited and the losses sustained.”

The federal public defender noted that Sharif is a first-time offender and typically first time offenders are not sentenced to maximum terms. And while he did not offer his view on a precise term in prison he told the judge that Sharif’s history and characteristics negate the need to sentence Sharif as a heartless and antisocial man bent upon victimizing the community.”

He then asked the court to impose a sentence of imprisonment that is far below the severe range” generated by the sentencing guidelines. The United States Probation Office determined that the applicable sentencing guidelines in this case range from 97 to 121 months in prison. The judge’s sentence comes to 100 months. 

The Sharif sentencing memo is dated March 5. The prosecutor’s memo, dated March 11, replies with a minimum sentence of seven years in prison. The judge went higher. 

Sharif was married in 2006 and his son was born in 2012. Sharif is now a stay-at-home father with primary responsibility for childcare. The family is supported financially by his wife’s income.

Sharif’s wife and many family members wrote letters to the judge seeking probation for Sharif, whom they described as a dedicated father and husband and a person whose record was unblemished until he fell into a situation he could not control. 

Last November, Judge Underhill sent a federal order to the U.S. Commodity Futures Trading Commission that requires Sharif to pay restitution of $2.230 million to the defrauded customers and a $900,000 civil penalty. He will also be permanently banned from trading.
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