Ponzi scheme sentences ex-West Chester financial adviser to five years in prison

PHILADELPHIA, PA — A former investment adviser was sentenced today in a U.S. District Court to five years in federal prison for orchestrating a Ponzi scheme in which he defrauded his clients of more than $7 million.

Lee D. Weiss, 51, was also ordered by United States Eduardo C. Robreno to serve three years probation after his prison sentence and to pay $7.5 million in restitution.

Investigators said he used some customers’ money to pay other customers, buy cars and pay for his country club membership.

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Weiss was the director of Family Endowment Partners, LP, an investment adviser registered with the United States Securities and Exchange Commission, which had an office in West Chester, which has since been shut down by the SEC.

Jacqueline Maguire, special agent in charge of the FBI’s Philadelphia division, said justice demands that financial fraudsters like Weiss be held accountable for their crimes.

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“Lee Weiss’ clients expected him to invest their money responsibly and he had a fiduciary duty to do so,” Maguire said in a prepared statement. “Instead, he embezzled millions for his needs and those of his business.”

US attorney Jacqueline Romero said honesty, integrity and trust all play a vital role in the relationship between a financial advisor and a client.

“When the advisor corrupts this relationship, the damage to the client’s financial security can be catastrophic,” Romero said. “The end result is as devastating and traumatic as if the victim had been robbed at gunpoint, and so we take it just as seriously. We will continue to hold accountable those who, like Mr. Weiss, commit crimes. earth-shattering financial crimes.”

According to Federal Court records:

  • In March 2022, the defendant pleaded guilty to defrauding an investment adviser in connection with this scheme to defraud his clients.
  • He cheated his own clients out of millions through alleged investments in a now-defunct Florida tobacco company and a series of private equity offerings.
  • Weiss told his clients that their money would be used for investment purposes when he diverted it to make Ponzi payments and fund his lifestyle.
  • Weiss kept lying to them about the value of their investments to keep them from learning about his thefts and convince them to keep paying him fees to “manage” their money.

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