File Photo
For nine years, Feisal Sharif, a Branford financier, ran a Ponzi scheme out of his Rose Street apartment (pictured) a few blocks from the town Green, a scheme the government says defrauded scores of investors of about $3.56 million.
On Tuesday Sharif, 43, the investment financier whose company was identified as First Financial, LLC, pleaded guilty to fraud charges stemming from his admitted operation of a Ponzi scheme, prosecutors said. Many of the victims — the U.S. Attorney suggested more than 50 investors were involved — were relatives, friends and others he knew through their mutual religious institution.
Sharif lived in a third-floor condo at 49 Rose St. and was arrested there about one year ago. According to the government’s complaint the unwitting investors gave funds to Sharif to invest in commodities futures. He would send them monthly statements showing their high returns and balances. The investors believed their funds were safely invested and earning a sizeable return.
But when investors tried to redeem their funds, they could not. The scheme unraveled after one investor, a retired law enforcement officer and his wife, told the FBI that they had invested more than $400,000 with First Financial only to discover they could not redeem their funds. Click here to read the story.
According to the U.S. Attorney’s Office, Sharif was simply paying existing investors with new money he raised from other investors. Very little of the investment money he raised was used to trade in commodity futures, and what he did invest in commodity futures did not generate returns anywhere near those he reported to investors, federal prosecutors said.
Early in the investigation, agents reported that 80 investors were defrauded of about $5.6 million. But the most recent numbers, lower in scope, may reflect a more accurate count or may reflect Sharif’s cooperation with government prosecutors. For one thing he waived his right to indictment and went straight to a guilty plea before U.S. District Judge Stefan R. Underhill in Bridgeport. this week. This saves a federal grand jury the work of a long investigation.
Sharif pleaded guilty to one count of fraud by a commodity pool operator, which carries a maximum term of imprisonment of 10 years, and one count of wire fraud, which carries a maximum term of imprisonment of 20 years. Judge Underhill has scheduled sentencing for November 19, 2013.
According to a stipulation agreed to by Deidre M. Daly, Acting U.S. Attorney and Paul F. Thomas, Sharif’s federal public defender, the plea agreement states that the judge must also order that the defendant make restitution. The government also reserved its right to seek restitution on behalf of victims.
The letter Daly and Thomas agreed to will be presented to Judge Underhill in open court and filed in this case, they said.
In addition, if the U.S. federal sentencing guidelines are used in this case, then the government has agreed to reduce Sharif’s offense level by a certain number of levels, but the judge does not have to accept the government’s recommendation. What this means is Sharif could face from 8 to 12 years in prison or six plus years to eight years in prison. Or the judge could impose a higher sentence, reject the guidelines or listen to a non-guidelines argument that Thomas might make.
Sharif also reserved the right to oppose any sentencing motion filed by prosecutors. According to a government statement released this week, the prosecutor “expressly reserves the right to respond to, challenge and oppose any sentencing motion filed by the defendant and to seek whatever sentence it deems appropriate.”
Sharif must also truthfully disclose to the Probation Office personal information requested by that office, including the submission of “a complete and truthful financial statement detailing the defendant’s financial condition.”
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