Federal prosecutors filed criminal charges Friday against Robert Stinson Jr. for allegedly defrauding 260 investors of $17 million in a Ponzi scheme that was halted in June by the Securities and Exchange Commission.
Stinson's Philadelphia company, Life's Good Inc., promised returns of 10 percent to 16 percent through real estate investments, but in reality Stinson used investors' money for himself and his family, and to pay earlier participants to perpetuate the scheme, the government alleged.
A 21-count grand jury indictment, unsealed Friday, also alleged that Stinson, 55, obstructed justice on June 29 by wiring $225,000 from Life's Good bank accounts to other Stinson accounts as federal agents searched his offices.
Stinson was arrested Friday morning and released on $100,000 bail after a court appearance.
His attorney, Stewart Patchen, of the Federal Community Defender Office in Philadelphia, did not return a call seeking comment.
The indictment said Stinson paid commissions of 5 percent to 10 percent to investment advisers who steered money his way. For example, on April 16, Stinson wired $31,500 in commissions to an unnamed Colorado financial adviser, according to the indictment.
The document also says that Brentwood Equity Advisors in Denver was among those that gathered money for Stinson. On July 26, one of the firm's principals, Michael McNamara, sent an e-mail invitation to 37 addresses regarding a replay of a conference call that day with Stinson. McNamara did not return a call to his mobile phone Friday seeking comment.
An investor in Nevada was glad to hear of the criminal charges. "It's just horrible what he's done to people," Jan Rudy said. "Even though we're all going to lose what we had, at least he's going to pay for it this time," she said. Rudy and her husband invested $50,000 with Stinson in 2008.
When they tried in August to take the money out of Stinson's Life's Good STABL mortgage fund immediately after the required two-year investment period was up, they found the company's phones had been disconnected.
Stinson, who has been convicted of fraud multiple times, could be sentenced to as many as 329 years on Friday's charges, including five counts of wire fraud, four counts of mail fraud, and nine counts of money-laundering, the U.S. attorney said.