A 70-year-old accountant from Monsey who cheated friends in clients in a $6 million Ponzi scheme that last 11 years has been sentenced in federal court to three years in prison.
U.S. District Court Judge Paul A. Crotty on Wednesday also ordered Alan Ritter to three years probation after he is released from prison and ordered him to pay restitution and make necessary forfeitures, which are still to be determined.
"Alan Ritter, like other Ponzi schemers before him, added personal betrayal to his fraud by fleecing unsuspecting victims who were friends and clients," said U.S. Attorney for the Southern District of New York Preet Bharara. "He will now face the penalty for his conduct."
The sentence came after Ritter pleaded guilty to three counts of wire fraud in September 2012.
The Ponzi scheme had its roots in 2001, when Ritter, who operated his own accounting practice in Rockland County, lost more than $500,000 from a seperate business venture - a debt collection business. Bharara said that to cover that loss, Ritter solicited hundreds of thousands of dollars in loans from friends and accounting clients, telling them that he was going to invest the money in real estate ventures.
For the next 11 years, Bharara said, Ritter ran a Ponzi scheme in which he borrowed more and more money that was purported to be used for business ventures but was actually used to cover interest payments on the original loans — and to pay his own personal expenses.
In an example of one of Ritter's frauds, in November 2011 he was given $650,000 by a family to pay off the family's debts, with leftover funds to be held for future uses. Instead, Ritter stole at least $530,000 or the original $650,000.
In another example, Ritter took in funds from a client so that back taxes could be paid to the IRS for the client. However, $75,000 was used for the Ponzi scheme and for Ritter's personal expenses.