June 28, 2019 / 3:34 PM / 5 months ago

U.S. charges New York man who boasted of huge investment returns with fraud

NEW YORK (Reuters) - A New York man who boasted of generating returns of 362% in fewer than five years by day-trading Standard & Poor’s 500 futures contracts was charged by U.S. authorities on Friday with defrauding investors out of more than $19 million and spending much of it on luxuries.

The Department of Justice charged Paul Rinfret with securities fraud and wire fraud, while the Securities and Exchange Commission filed civil charges against the 70-year-old resident of Manhasset, New York, located on Long Island.

A lawyer for Rinfret could not immediately be identified.

Authorities said Rinfret lured investors into buying interests in his Plandome Partners limited partnership by touting his investing successes, which he said involved the use of a proprietary algorithm that also enabled him to go years without a monthly loss.

In fact, authorities said Rinfret did little trading and often lost money when he did, and instead used Plandome as a “piggy bank” for the rental of a 6-bedroom vacation home in the Hamptons, cars, jewelry, custom kitchen cabinets, an engagement party for his son, payments to family, and other expenses.

Authorities said Rinfret admitted parts of his fraud in communications this year with two investors who sought to redeem their money.

The SEC said Rinfret told one investor that “everything was fabricated,” including account statements, and that while he was trying to raise money from four of his wife’s business clients, he added: “if I’m going to jail, why drag 4 new ppl into this.”

The cases are U.S. v. Rinfret, U.S. District Court, Southern District of New York, No. 19-mag-06049; and SEC v Rinfret et al in the same court, No. 19-06037.

Reporting by Jonathan Stempel in New York; Editing by James Dalgleish

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