A Marblehead investment adviser who allegedly defrauded two of his elderly clients of a combined $750,000 was charged Monday with wire fraud.
Ryan Nestor, 32, formerly was registered with an affiliate of Mass Mutual, according to U.S. Attorney Michael Sullivan’s office, which brought the criminal case. He worked out of a Boston office.
Prosecutors said Nestor invested funds in what the government called a “massive ponzi scheme,” planning to keep some of the proceeds. His clients allegedly did not know how the money was being invested.
Feds say adviser defrauded elderly clients
By Julie Manganis
MARBLEHEAD — An investment adviser from Marblehead has been charged with defrauding two elderly investors by putting their money in what prosecutors say turned out to be a massive Ponzi scheme.
Ryan Nestor, 32, was cited yesterday in a two-count information charging him with wire fraud.
Prosecutors say he defrauded the clients out of more than $750,000 by investing their money in a company that was later sued by the Securities and Exchange Commission.
Nestor, who runs a business called Harbor Point Capital LLC, was a former registered representative for a Mass Mutual-related business. Prosecutors allege that Nestor “misappropriated” the money by investing two clients’ funds in what turned out to be a massive Ponzi scheme, without the knowledge or consent of his clients.
The two clients live on Martha’s Vineyard. According to the information filed in U.S. District Court, Nestor, in April and May 2007, invested their money in a California-based company called AOB Commerce Inc., which purported to make loans to businesses in Asia.
Prosecutors allege that Nestor made investments on behalf of both clients, $170,000 for one client and $590,000 for the other in AOB by forging their signatures on authorizations to wire money from their accounts to a bank in California.
Nestor allegedly had an agreement with AOB under which he would receive a portion of the anticipated return on the investment.
A month later, in June 2007, the SEC sued AOB, alleging that it was basically a giant Ponzi scheme that used investor funds to pay other investors.
If convicted, Nestor could face up to 30 years in prison and a $1 million fine on each of the two counts.
Prosecutors are also seeing the forfeiture of Nestor’s home at 51 Bubier Road in Marblehead, which he purchased in 2007 for $725,000.
Generally, when prosecutors file an information, it means a defendant has waived his right to have the case presented to a grand jury for indictment.
His lawyer, Peter Krupp, said last night that Nestor “had no knowledge the investment he made on behalf of his clients was not legitimate. In fact, he invested and lost his own money in that investment.”
“Mr. Nestor has cooperated with the government throughout this investigation and deeply regrets the losses suffered by his clients,” Krupp went on to say.
Marblehead – A Marblehead investment advisor was charged today with wire fraud in connection with a scheme to defraud two of his clients.
Ryan Nestor, 32, of Marblehead has been charged in a two-count information alleging that Nestor defrauded two investment clients out of more than $750,000, announced United States Attorney Michael J. Sullivan and Warren T. Bamford, special agent in charge of the Federal Bureau of Investigation Boston Field Division.
According to the information, Nestor, a former registered representative for a Mass-Mutual-related entity, misappropriated more than $750,000 in client funds by investing those funds, without the knowledge or consent of his two elderly victims, in an entity that turned out to be a massive Ponzi scheme. According to investigators, Nestor invested the client funds pursuant to an agreement whereby Nestor expected to receive a portion of the returns on the improper investments.
If convicted, Nestor faces up to 30 years in prison, followed by five years of supervised release and a $1,000,000 fine on each charge.
The Federal Bureau of Investigation Boston Field Division investigated this case. Assistant U.S. Attorney Sarah E. Walters of Sullivan’s Economic Crimes Unit is prosecuting it.
BOSTON — A Massachusetts investment advisor has been charged in a scheme to defraud two clients out of more than $750,000.
Ryan Nestor of Marblehead was accused Monday of misappropriating the money by investing it in California-based AOB Commerce Inc., which purported to make loans to companies in Asia.
In 2007 the Securities and Exchange Commission accused AOB of using invested funds in a Ponzi scheme, to repay interest due to other investors. Prosecutors said Nestor expected to receive part of the returns. AOB has said it believed it was following the law.
Nestor’s attorney, Peter Krupp, said Nestor did not know the investment he made on behalf of his clients was not legitimate and “deeply regrets” their losses. Krupp said Nestor also lost some of his own money and is cooperating with the government.