Robert Stinson Jr.'s three-decade career as a "cunning and deadly" con man earned him 33 years in federal prison at his sentencing Tuesday.
U.S. District Judge Michael M. Baylson sentenced the five-time fraudster for bilking at least 263 investors out of more than $14 million in a Ponzi scheme that was shut down in 2010 by the Securities and Exchange Commission.
Stinson's scheme collapsed in June 2010 when law enforcement officials raided the Philadelphia offices of his company, Life's Good Inc., which Stinson started in 2006.
Stinson told clients that Life's Good, which employed 170 at its peak, specialized in making short-term real estate loans that would pay investors a 16 percent annual return.
Assistant U.S. Attorney David Axelrod said Stinson was such a consummate con man that he was able to "trick reputable businesses" into providing a "patina of legitimacy" for Life's Good's investment funds.
Axelrod said Stinson was even able to dupe the financial data provider Morningstar Inc. into listing Life's Good STABL Mortgage Fund on its index of best-performing hedge funds.
The prosecutor said the Morningstar "endorsement" was one of several "highly effective tools" Stinson used to lure investors. (Three investors are now suing Morningstar, alleging the firm didn't perform an adequate review of the fund. Morningstar is seeking dismissal of the lawsuit, saying its ratings are based on opinions protected by the First Amendment.)
The feds said the other tool used by Stinson was a 46-page phony prospectus that made three Life's Good real estate investment funds appear legitimate. In reality, the funds made only a handful of loans, prosecutors said.
Stinson used most of the money to invest in numerous unrelated businesses, including a talent agency, a recording studio, a health-care consulting firm, a sports marketing firm, and an online TV station.
Federal defender Stuart Patchen said that the companies "did real business" and that Stinson hoped they would succeed so he would be able to pay back his victims.
Stinson also lavished money on family and friends and made interest payments to some investors.
Stinson said he was "so sorry" for hurting so many, but insisted, after almost a year in federal custody, that he was now a "changed" man.
"My life is now dedicated to serving God . . . I don't care what anybody says," he said. "I'm only going to do what God wants me to do."
Axelrod, who described Stinson as "cunning and deadly," said an SEC receiver has been able to recover only about $580,000 of the money Stinson stole. Many victims lost their nest eggs and have had to return to work or live with their children, he said.
"It is not possible to overstate the harm he has caused," the prosecutor said. "These [investors] weren't people who could stand to take the hit."