A Pennsylvania man with prior convictions for financial and securities fraud pled guilty to operating a Ponzi scheme that swindled investors out of over $17 million. Robert Stinson Jr., 56, pled guilty to a 26-count indictment that included charges of wire fraud, mail fraud, money laundering, and bank fraud. Under federal sentencing guidelines, Stinson faces a recommended sentence of twenty-seven to thirty-three years in prison.
According to the indictment, Stinson began soliciting investors through several companies he operated, including Life's Good Inc. ("Life's Good") and Keystone State Corporation ("Keystone"). Stinson falsely represented to investors that Life's Good acted as a portfolio manager for several hedge funds that invested in real estate, including:
- Life's Good S.T.A.B.L. Mortgage Fund, LLC
- Life's Good Capital Growth Fund, LLC
- Life's Good High Yield Mortgage Fund, LLC
- Life's Good I.A. Capital Fund, LLC
In operating the funds, Stinson made numerous misrepresentations and omissions to potential investors, including that Stinson was a graduate of the Massachusetts Institute of Technology and that he had extensive business experience. Stinson also concealed the fact that he had previously been enjoined by the SEC from committing securities fraud. Investors were promised annual returns ranging from ten to sixteen percent, and told that their investments were secured by first mortgages in underlying real estate assets. Additionally, Stinson falsely claimed that the funds could not lose money due to their ability to repossess the underlying collateral and resell at a profit. Instead of investing the funds, Stinson invested in several unrelated businesses, made lavish gifts to family and friends, and used new investor funds to make interest payments to existing investors. In total, Stinson stole over $17 million from more than 260 investors.
Sentencing is currently scheduled for December 13. Stinson will also likely face an order of restitution from United States District Judge Michael M. Baylson.