BOSTON – A Boston man was arrested today in connection with a three-year, multi-million dollar fraud scheme.
Nathaniel Ponn, 27, of Boston, was charged in a criminal complaint with two counts of wire fraud. He will appear before U.S. District Court Magistrate Judge Judith G. Dein at 2:15 today.
According to court documents, it is alleged that from 2012 to April 2015, Ponn opened more than 400 brokerage accounts at nine investment firms throughout the United States, and used false names, social security numbers, assets and income to open many of them. The firms allow customers to transfer funds from another financial institution into the customer’s brokerage account through an Automated Clearing House (ACH) transfer, by providing the account number and financial institution where the account was held and the amount to be transferred.
According to the complaint, from February 2014 to April 2015, Ponn provided ACH transfer information to brokerage firms for accounts he opened on more than 350 occasions, totaling more than $8.5 million in attempted transfers. In each instance, the bank account Ponn provided did not have the amount of funds requested or, in some circumstances, did not even exist. Although the ACH transfers were rejected, the fraudulent transfers created the false appearance that the brokerage accounts had cash available to purchase securities.
Through this scheme, Ponn was allegedly able to purchase securities totaling more than $2.7 million in accounts at eight investment firms. When the firms discovered that the ACH transfers were rejected, they liquidated the securities in Ponn’s accounts.
The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $1 million on each count. Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.
The U.S. Attorney’s Office received valuable assistance from the Securities and Exchange Commission, which filed suit today against Ponn arising out of the scheme to defraud investment firms.
United States Attorney Carmen M. Ortiz; Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, and Boston Police Commissioner William Evans, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.
The details contained in the complaint are allegations. The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.