Woman Pleads Guilty to $8 Million Ponzi Scheme

A New Jersey woman admitted to running a Ponzi scheme that scammed investors out of more than $2 million.  Jenifer Devine, 39, entered a guilty plea to charges of wire fraud in connection with the scheme that ultimately took in more than $8 million from investors.  Devine was arrested and charged in late 2010. Wire fraud carries a maximum sentence of twenty years in prison and criminal monetary penalties of up to $1 million.

According to the indictment, Devine operated the scheme from December 2008 until September 2010 through her company, Devine Wholesale.  The business was advertised as a wholesale business that bought and sold clothing and electronics for profit.  To solicit investors to finance the operation, Devine created fictitious inventory lists and made both oral and written representations the the business was profitable.  Investors were given promissory notes reflecting their investment and providing for payment of interest and return of principal within short periods, often thirty to sixty days.  Investors were typically promised interest rates of 25% per investment.  Yet, instead of running a wholesale business, Devine had virtually no business operations and instead used the vast majority of incoming funds to pay other investors.  The remaining funds were used to fund a lavish lifestyle that included travel and retail purchases.

Sentencing has been scheduled for December 20, 2011.  Devine faces a maximum prison sentence of twenty years, criminal monetary penalties, and will likely be ordered to pay restitution to defrauded victims.

A copy of the charging document is here.