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Authorities arrested two New York men Thursday in connection with a $96 million Ponzi scheme. Greg Cergol has the story.
Authorities arrested two New York men Thursday in connection with a $96 million Ponzi scheme.
Brian Callahan and Adam Manson are charged in federal court in Central Islip on charges of conspiracy to commit securities and wire fraud.
Callahan, an investment fund manager, was arrested at a relative's home in Old Westbury on Long Island. Manson, a real estate developer and Callahan's brother-in-law, was arrested at his home in Manhattan, officials said.
According to the U.S. attorney's office, Callahan raised more than $118 million from 40 different investors through four funds he managed between December 2006 and February 2012.
Callahan allegedly assured investors the money would be placed in securities, but officials say he misappropriated $96 million.
Manson's lawyer, Robert Anello, said in a statement that the charges are unfounded. A lawyer for Callahan did not immediately respond.
Authorities say part of the scam involved investments in the Panoramic View, a 117-unit beachfront resort and residence development in Montauk, that Callahan owned with Manson.
“The defendants used one of Long Island’s landmarks, the Panoramic View Resort, to perpetrate a wide-ranging fraud,” said U.S. Attorney Loretta Lynch. “Callahan gave his word that he would invest his clients’ funds safely and responsibly in established vehicles. Instead, he simply stole the funds to prop up his partner’s failing investment."