An Allentown man pleaded guilty in Federal Court yesterday to charges in connection with a decade-long Ponzi scheme that defrauded investors of millions of dollars.
U.S. Attorney Pat Meehan announced that Craig H. Reinhard pleaded guilty to participating in a scheme to defraud investors - many of them elderly - of nearly $4 million by selling them fraudulent certificates of deposit. The scheme went on from at least August, 1994 through March, 2006.
Reinhard, 51, and Debra Bzik, 48, were co-owners of IDPM Group, Inc., a benefit counseling service and insurance agency in Allentown. Renheid told potential investors that the CDs were insured by the Federal Deposit Insurance Corporation (FDIC); but the insured CDs never actually existed.
The defendants used the proceeds from the scheme to make payments to earlier investors, and to pay their own business and personal expenses, including their own salaries, home mortgage payments and college tuition for their children.
Reinhard pled guilty to one count of mail fraud and one count of making false statements to the Securities and Exchange Commission. The charges carry a maximum sentence of 25 years imprisonment and a $500,000 fine.