The president of a New York-based registered investment adviser pled guilty Thursday in federal court to stealing $11.5 million from investors in a Ponzi scheme, and now faces up to 25 years in prison.
Hector May, president of Executive Compensation Planners Inc., and an unnamed co-conspirator, participated in a scheme to defraud clients beginning in the late 1990s, according to the U.S. Attorney's Office for the Southern District of New York.
The Securities and Exchange Commission filed a parallel civil lawsuit Thursday against Mr. May and his daughter, Vania May Bell, the controller of the advisory firm, for perpetuating the Ponzi and misappropriating roughly $8 million of client assets.
Mr. May, 77, of Orangeburg, NY, induced more than 15 clients to turn over money from their securities accounts under the false pretense that he would use the money to purchase bonds and other investments on their behalf, according to a
court filing in the criminal case. Instead, he used the money for personal and business expenses and to pay back other investors.
(More: CEO in Woodbridge Ponzi scheme fined $120 million by SEC)
"This case has all the markings of a classic Ponzi Scheme," said Philip R. Bartlett, inspector-in-charge of the New York Office of the U.S. Postal Inspection Service. "His day of reckoning has arrived."
Mr. May, who has headed up the RIA since 1982, confessed to one count of conspiracy to commit wire fraud and one count of investment adviser fraud before Judge Judith C. McCarthy in the U.S. District court for the Southern District of New York.
(More: Ex-broker pleads guilty to 18-year Ponzi scheme, costing elderly investors $9 million)
The first count carries a maximum sentence of 20 years in prison and a maximum fine of $250,000. The second has a maximum five-year sentence and $10,000 fine. The sentencing has been scheduled for March 15, 2019 before Judge Vincent L. Briccetti.
Mr. May's attorney, Kevin Conway, didn't immediately return a request for comment.
