New York Man Indicted For $2 Million Ponzi Scheme

A New York investment manager has been arrested on multiple felony charges that he operated a Ponzi scheme that duped several companies out of at least $2 million. Steven Canady, 42, faces four counts of grand larceny in the second degree, four counts of criminal possession of stolen property, and one count of scheme to defraud in the first degree.  Canady has pleaded not guilty to the charges, and is currently being held on $1 million bail.

Canady was the owner and operator of Alliance Warburg Capital Management ("Alliance Warburg"), holding himself out as the Vice President of Structured Finance.  In that position, Canady is accused of soliciting various companies under the guise that he could assist in locating and securing funding for those companies and their business ventures.  Each of the potential companies was promised that, after paying a fully refundable due diligence fee or pre-paid interest, Alliance Warburg would secure them funding.  In total, Alliance Warburg received more than $2 million in due diligence fees or pre-paid interest from three companies: ABA Ventures, of Florida, West Chester Host, LLC of Kentucky, and Lents Construction in Tennessee.  Additionally, a Georgia company, Global Capital Advisers ("Global Capital"), was promised a lucrative short-term return in exchange for a $150,000 investment in one of Canady's business ventures.  

However, no funding was ever secured by Canady or Alliance Warburg for the benefit of ABA Ventures, West Chester Host, or Lents Construction. Nor did Canady make the promised interest and principal payment to Global Capital.  Rather, authorities allege that Canady misappropriated those funds in typical Ponzi scheme fashion to pay off earlier victims or to support a lavish lifestyle that included travel, dining, and living expenses. 

According to prosecutors, Canady was previously convicted by a Georgia court of similar rimes.  Canady has also run afoul of securities regulators in other states, including a 2007 cease-and-desist order issued by the Connecticut Department of Banking relating to an alleged offering of unregistered securities.