A Long Island financial advisor was sentenced to serve the next 55 months in federal prison after previously pleading guilty to operating a Ponzi scheme that caused nearly $2 million in losses to clients and friends. Paul Sullivan, 50, received the sentence from U.S. District Judge Leonard D. Wexler after pleading guilty to wire fraud. In addition to the prison sentence, Judge Wexler ordered Sullivan to pay $1.9 million in restitution and serve three years of supervised release after completion of his sentence.
Sullivan, a previously-licensed financial advisor, used funds entrusted to him by his clients for various unauthorized investments that later resulted in significant losses. When confronted by those clients, Sullivan attempted to avoid any potential ramifications by promising those investors that he would completely reimburse their losses. Instead, Sullivan pitched a different group of clients to invest in what he characterized as "private investment opportunities" that, in reality, were simply the transfer of those client funds to the previously defrauded investors.
During a subsequent client meeting that was recorded by a hidden camera, Sullivan admitted to using client funds to repay other client investment losses and stated that "what I did was completely illegal, completely wrong...everything I've done was wrong, was illegal, I have nothing to say."
Sullivan was arrested in July 2012 and subsequently pleaded guilty in July 2013.