An Old Westbury man has admitted to ripping off at least 40 investors in a $96 million Ponzi scheme that authorities called “one of the largest investment frauds in Long Island history.”
Brian Callahan pleaded guilty Tuesday at Central Islip federal court to securities fraud and wire fraud. The 44-year-old fraudster faces up to 40 years in prison, plus restitution.
“Through lies and deceit, he misled investors and stole investor funds, including investments from a local fire department, to support a lavish lifestyle,” said Loretta Lynch, U.S. Attorney for the Eastern District of New York.
Prosecutors said Callahan told victims that their money would be invested in mutual funds, hedge funds and other securities, but he instead diverted money from four different investment funds that he managed to buy expensive cars, homes in Old Westbury and Westhampton and a Montauk resort he co-owned between 2006 and 2012.
Investigators described that resort, Panoramic View, as “an unprofitable 117-unit beachfront resort development,” which he owned with his brother-in-law, Adam Manson, who pleaded not guilty. His case is pending.
Callahan covered up the scheme by hiding the money in six offshore accounts, lying to the victims about the nature of the investments, and sending fake account statements to investors that falsely showed that their funds were invested and performing well, authorities said.
