A Florida man entered a guilty plea to operating a Ponzi scheme that scammed more than $2 million from investors. Arthur Strasnick, 63, of Ormond Beach, Florida, pled guilty to two counts of mail fraud and one count of possession of means of identification of another with intent to commit a crime. Mail fraud carries a maximum prison sentence of fifteen years, while the possession count carries a maximum sentence of ten years. The United States Probation Department will deliver a sentencing recommendation based on federal sentencing guidelines.
As part of his guilty plea, Strasnick admitted that in his role as President and CEO of Backstreet Associates, he made false representations to investors to entice them to invest with him. Among these misrepresentations, Strasnick guaranteed investors annual rates of return ranging from twelve to twenty percent. Investors were provided with fictitious account statements that purported to show investment growth, and received periodic interest payments purporting to represent continuing investment returns. Strasnick also admitted to the use of another individual's identification in order to open an American Express account that was used to make unauthorized purchases. In total, authorities allege that Strasnick caused losses exceeding $2.1 million to investors.
Sentencing has been scheduled for January 19, 2012.