Not a Lexis Advance subscriber? Try it out for free.


California Man Receives 65-Month Sentence for $3.3 Million Ponzi Scheme

A California man has been sentenced to serve 65 months in federal prison after pleading guilty to operating a Ponzi scheme that duped investors out of over $3 million.  Krittibas Ray, 43, of Albany, California, was indicted in December 2011 on two counts of wire fraud and one count of money laundering and later pled guilty to two counts of wire fraud. Along with his prison sentence, United States District Court Judge Susan Illston ordered Ray to repay $2.9 million in restitution to his victims.

From February 2008 to December 2011, according to authorities, Ray promised potential investors that their funds would be safely placed in an Indian bank account and invested in various hedge funds.  Investors were told that they could expect guaranteed annual returns between 7 and 8.5 percent, and that the hedge funds selected by Ray were profitable.  Instead, Ray operated a classic Ponzi scheme in which he used money from new investors to pay returns to existing investors.  Additionally, Ray used investor funds for a variety of personal expenses, including funneling over $80,000 to divorce attorneys.  

Ray, who is Indian-American, listened to fifteen of his victims give statements before Judge Illston detailing the impact Ray's fraud had on their lives.  Many implored Judge Illston to increase Ray's sentence and asked for a guarantee of any restitution ordered.  Some also questioned whether Ray had reported all of his assets, noting that he had previously bragged about having hidden assets in India and the Cayman Islands.  

While in prison, Ray will begin paying restitution at $25 each per quarter.  

For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.

For more information about LexisNexis products and solutions connect with us through our corporate site.