A Bergen County, N.J., woman who owned a purported wholesale merchandise broker admitted to running a multimillion-dollar Ponzi scheme that resulted in losses to investors of more than $2 million, according to an announcement by U.S. Attorney Paul J. Fishman.
Jenifer Devine, 39, of Fair Lawn, owner of Devine Wholesale, pleaded guilty before U.S. District Judge Claire C. Cecchi in Newark federal court to an Information charging her with wire fraud.
According to documents filed in this case and statements made in court:
From December 2008 through September 2010, Devine, through Devine Wholesale, solicited investors from New Jersey and throughout the United States, telling them she would use their money to fund her wholesale clothing and electronics business. Devine admitted that to induce the investors to make 30- to 60-day investments she promised returns of up to 25 percent per investment. Devine also showed some investors false and fraudulent inventory lists of products she was purportedly reselling. As a result of these solicitations, more than 15 investors sent over $8 million to Devine and Devine Wholesale during this time period.
Devine admitted that, contrary to her representations to investors, Devine Wholesale was not a legitimate business. Devine admitted that instead of using the investor money to purchase clothing or electronics, she used the vast majority of new investor funds to make principal and interest payments to existing investors in Ponzi scheme fashion. Devine also used a portion of the investors’ money on various personal expenses, such as a Royal Caribbean cruise and purchases at luxury retailers such as Burberry, Gucci and Coach.
Devine admitted that as a result of her conduct, investors lost more than $2 million.
The wire fraud count to which Devine pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of up to $250,000 or twice the amount of gain to Devine or loss to victims as a result of her criminal conduct. Sentencing before Judge Cecchi is scheduled for Dec. 20, 2011.
U.S. Attorney Fishman credited Special Agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward, for the investigation leading to today’s guilty plea.
Brought to you by the New Jersey Law Offices of Garces & Grabler, P.C.