New Jersey Man Sentenced to Prison for $2.4 Million Ponzi Scheme

A former investment adviser was sentenced to nearly five years in prison for orchestrating a Ponzi scheme that swindled investors out of over $2 million.  Carlo Chiaese, 38, of Livingston, New Jersey, had previously pled guilty to one count of securities fraud before United States District Judge William J. Martini.  Securities fraud carries a maximum sentence of twenty years in prison and up to a $5 million fine.  

Chiaese, who had worked in the financial industry since at least 1999, operated an independent investment firm by the name of CGC Advisers, LLC.  From November 2008 to September 2010, Chiaese solicited clients by portraying the prospect of steady annual returns through a conservative investment strategy utilizing stocks and bonds.  In total, nearly $3 million was raised from investors, including approximately $1.7 million from a pension fund representing tugboat and ferry workers in New York and New Jersey.  To make the operation appear legitimate, investors were provided with account statements containing fictitious securities holdings.  Yet, instead of investing in securities, Chiaese used the majority of investor funds to sustain a glamorous lifestyle that consisted of high-end cars, expensive travel, and luxury fashion.  The remainder of funds were used to make transfers to family members and to make supposed interest payments to existing investors.

Judge Martini also ordered Chiaese to pay $2.5 million in restitution to swindled investors, and to serve three years of supervised release.