A Florida man received a twenty-year prison sentence for orchestrating a Ponzi scheme that bilked investors out of nearly $20 million and claimed many retired teachers among its victims. James Davis Risher, 61, was sentenced by United States District Judge Steven D. Merryday after previously pleading guilty to mail fraud, money laundering, and engaging in an illegal monetary transaction on September 9. The charges had carried a maximum potential sentence of fifty years in prison, although federal sentencing guidelines recommended a lower amount. Along with the sentence, Risher was also ordered to pay nearly $17 million in restitution to his victims.
As previously covered by Ponzitracker, Risher was one of two men indicted earlier this year stemming from his operation of a private equity fund marketed mainly as Safe Harbor Investments or Safe Haven ("Safe Harbor"). The fund solicited potential investors by making numerous misrepresentations as to the fund's investment objective and past performance, including that the fund had consistently out-performed the market since 2000 with annual returns ranging from 14% to more than 124% since 2000. Investors received quarterly account statements showing consistent growth, along with regular newsletters and invitations to annual golf tournaments hosted by Safe Harbor. Additionally, Risher and his wife also operated several entities that purported to engage in foreign currency trading and real estate investing. However, Risher only invested a small amount of the funds, and sustained heavy losses in doing so. Out of the $20 million collected from investors, approximately $4 million was paid out in purported interest and principal payments. The remainder of approximately $16 million was misappropriated for Risher's personal and business expenses.
Ironically, a background check of Risher would have revealed an extensive criminal history dating back to the 1990s consisting of several fraud convictions. After serving time in Georgia state prison in the early 1990s, Risher pled guilty in Florida to federal charges of mail fraud, securities fraud, and money laundering charges in 1997. He was sentenced to nearly 8 years in federal prison for those offenses, and had only recently been released from prison when he began the Safe Harbor scheme.
The Securities and Exchange Commission ("SEC") also filed a parallel civil action against Risher seeking disgorgement of profits and civil monetary penalties. That action remains pending.
A copy of the Criminal Complaint filed against Risher is here.
A copy of Risher's Plea Agreement is here.
A Copy of the SEC Complaint is here.