Donald Anthony Young had a zest for the finer things in life, including a $1.9 million home in Palm Beach, Fla., and a horse farm and home in Coatesville maintained by a staff and personal chef.
As authorities tell it, Young, 38, of Palm Beach, was living this lavish lifestyle with other people's money.
A federal grand jury yesterday charged Young with mail fraud and money laundering in connection with running a $26 million Ponzi scheme from November 1999 to April 2009.
During that time, Young operated an investment-advisory business in Kennett Square and obtained about $96 million from investors, authorities alleged.
The indictment charged that Young promised to invest clients' money in blue-chip, large-cap companies, but instead diverted more than $26 million for his own use.
In addition to residences in Palm Beach and Coatesville, Young also maintained a home in Northeast Harbor, Maine.
Authorities said that Young and his investment-fund accountants got monthly statements listing deposits and disbursements from the account, but clients did not.
Instead, Young made up bogus quarterly statements for investors that accountants never saw. The statements showed inflated fund balances but didn't reflect that Young had transferred investors' funds to his own accounts, according to authorities.
He then mailed or faxed the bogus quarterly statements to investors, the indictment said.
Authorities said that Young told his accountants to refer all investor inquiries to him.
Young kept his Ponzi scheme rolling by paying investors who sought to cash out their investments by liquidating other investors' contributions and did not tell them, the indictment charged.
The charging papers said that after Young had spent millions of investor funds for his personal benefit, the fund's balance tanked and Young ginned up phony statements to submit to a broker servicing his investment account.
The fake statements showed that Young had $23 million in two other investment accounts.
In addition to his homes, authorities said, Young spent his investors' funds on golf and country clubs, cars, boats, antiques, fine art, jewelry, a sauna and part ownership in a jet.
By January 2009, the Securities & Exchange Commission began investigating Young's activities. The indictment said that Young "attempted to thwart" the probe by first refusing to supply investigators with documents and later by submitting misleading and incomplete documentation.
The SEC subsequently filed a civil suit against Young in federal court last April, and a federal judge appointed a receiver to liquidate his assets. Assistant U.S. Attorney Paul Gray said that about $9 million had been recovered for investors.