Ponzi Princess Jailed
“Ponzi Princess”, Laurie Schneider has been sentenced to 36 months behind bars. It seems that every month there is another investment scam that is shutdown.
“Laurie Schneider, 39, played the part of a successful entrepreneur, willing to help others invest in equipment and machinery deals as well as Long Island real estate. In reality, she was a con artist, using lies and false assurances to bilk unsuspecting investors out of millions of dollars. Schneider ran a classic Ponzi scheme, using investor money for her own selfish purposes,” stated United States Attorney Lynch.
According to court filings and facts presented during the plea proceeding, Schneider used two shell corporations to operate a $6.9 million Ponzi scheme to steal money from unsuspecting investors. Schneider began accepting money in September 2006 from individuals seeking to earn profits on investments in overseas machinery and equipment deals and real estate on Long Island. In the first scheme Schneider operated a shell corporation called Janitorial Close-Out City Corp. (Janitorial Close-Out). Schneider falsely represented to investors that Janitorial Close-Out bought industrial equipment and machinery manufactured by companies in China for resale in the United States. In order to lure investors, Schneider, among other things, falsely represented that (1) she personally guaranteed varying high rates of return on investments of up to 60 percent, (2) she had a business contact with strong ties to companies in China that manufactured industrial equipment and machinery, and (3) she would be able to buy the Chinese-made industrial equipment and machinery at wholesale prices which Janitorial Close-Out would later resell in the United States at a 15 to 60 percent profit over a short period of time.
In a subsequent scheme, Schneider operated a shell company incorporated as Eager Beaver Realty LLC (Eager Beaver). Schneider touted Eager Beaver’s ability to purchase and sell real property on Long Island that was in foreclosure proceedings or otherwise available to Eager Beaver at significantly low prices. Schneider provided investors with written investment agreements in which she falsely represented and guaranteed that 100 percent of the invested funds would be used by Eager Beaver to purchase foreclosed real property for resale at prices that would enable Eager Beaver to pay as much as a 20 percent return on investment along with a 100 percent return of principal. To further the scheme, Schneider used a portion of the money that she obtained from Eager Beaver investors to pay returns to early investors in the China Deals. In reality, Eager Beaver earned no profits. In fact, Schneider was operating a Ponzi scheme, paying returns to early investors using money that she fraudulently obtained from later investors. In addition, Schneider diverted some of the investors’ money to pay personal expenses, including car payments on luxury automobiles and country club dues.
– Source FBI.gov Photo Credit: Ed Betz