Man Guilty of Multi-Million Dollar Scheme to Defraud Brokerage Firms

Man Guilty of Multi-Million Dollar Scheme to Defraud Brokerage Firms

A Boston man pleaded guilty on Wednesday, December 7, in U.S. District Court in Boston in connection with a three-year, multi-million-dollar fraud scheme.

Nathanial Ponn, 28, pleaded guilty to three counts of wire fraud.  U.S. District Court Judge Allison D. Burroughs scheduled sentencing for March 1, 2017.

From 2012 to April 2015, Ponn opened more than 400 brokerage accounts at nine investment firms throughout the United States, using false names, Social Security numbers, assets and income to open many of them.  These firms allowed customers to transfer funds from one financial institution into the customer’s brokerage account through an Automated Clearing House (ACH) transfer, by providing the account number and financial institution where the account was held and the amount to be transferred.  Between February 2014 to April 2015, Ponn provided ACH transfer information to brokerage firms for accounts he opened on more than 350 occasions, totaling more than $8.5 million in attempted transfers.  In each instance, the bank account Ponn provided did not have the amount of funds requested or, in some circumstances, did not even exist.  Although the ACH transfers were rejected, the fraudulent transfers created the false appearance that the brokerage accounts had cash available to purchase securities.

Through this scheme, Ponn was able to purchase securities totaling more than $2.7 million in accounts at eight investment firms.  When the firms discovered that the ACH transfers were rejected, they liquidated the securities in Ponn’s accounts.  As part of the scheme, Ponn also attempted, unsuccessfully, to get the brokerage firms to send him checks totaling about $250,000, based on the same false ACH information.

The charge of wire fraud provides for a sentence of no greater than 20 years in prison, three years of supervised release and a fine of $1 million on each count.  Actual sentences for federal crimes are typically less than the maximum penalties. Sentences are imposed by a federal district court judge based upon the U.S. Sentencing Guidelines and other statutory factors.