A California man was sentenced to a seven-year prison term for orchestrating a Ponzi scheme that bilked more than $35 million from victims. Dean Gross, of Agoura Hills, California, and a former soccer coach with the Agoura Youth Soccer Association, received the sentence after previously pleading guilty to a single count of wire fraud. In addition to the criminal charges, Gross was also the target of a civil enforcement action filed by the Securities and Exchange Commission that charged him with multiple violations of federal securities laws.
Beginning in 2006, Gross operated Bridon Entertainment ("Bridon"), telling potential investors that he was a veteran of the advertising industry and had developed a method to profit from the purchase and resale of advertising time and space at below-market rates. To convince investors of the legitimacy of the scheme, Gross often produced a copy of the purported contracts with the potential ad-buyer. Investors could make short-term investments with guaranteed rates of return ranging from 8% to 30%, or up to a one-year investment with returns of 10% to 20%. Investors were drawn in by Gross's 'family man' persona, and from his reputation in the community as a former youth soccer and basketball coach. In total, nearly 40 investors entrusted approximately $35 million to Bridon.
However, Gross did not have the relationships he purported to have within the advertising industry, nor was he involved in the business of buying and selling discounted advertising time. Instead, Gross ran a Ponzi scheme in which he used incoming investor money to pay interest and returns of principal to existing investors. Investor funds were used not only for these Ponzi-style payments, but approximately $6 million was diverted to Gross for various personal expenses. Authorities estimated that total victim losses exceeded $13 million.
In addition to his sentence, Gross was also ordered to pay $15.4 million in restitution to victims.
A copy of the SEC complaint is here.
A copy of the criminal charging document is here.