Connolly plead guilty yesterday of both securities fraud and money laundering.
Beginning in at least 2006 David Connolly, 51, of New Jersey, USA, purposefully mislead his victims– the would-be real estate investors– by presenting false investment performance reports and making other promises about how their money would be held and spent. He then took their money (to the tune of US$50 million from more than 200 victims) and spent the income to pay off other ‘investors’, to indulge in other real estate transactions, as well as to pay himself.
It was only in 2009 when Connolly could not keep up with his Ponzi scheme (a fraudulent investment operation usually promising high returns and little to no risk for investors) and began to default on the mortgage payments for the properties that finally his plans began to unravel.
After investigation by the American FBI, Connolly was first indicted in May of 2012 and his first set of charges returned from a grand jury in January 2013 (for securities fraud, mail fraud, wire fraud, and money laundering).
Yesterday’s charges — with a guilty plea by Connolly himself– added to the securities fraud and money laundering charges from January.
The case brought against Connolly was a coordinated effort by the FBI and President Obama’s Financial Fraud Enforcement Task Force.